V. THE INSTITUTIONAL APPROACH AND THE ASSUMPTIONS OF DEFAULT VERTICALITY

In this section, I consider the relationship between the institutional approach and the assumptions underlying default verticality. By demonstrating how the institutional approach departs from these assumptions, I also aim to further clarify and refine the content of the institutional approach itself, as it emerged from the previous section.

Recall that in chapter one, I discussed how unitary sovereignty, abstract freedom and individual responsibility are the three pillars upon which default verticality rests.^[470] Existing forms of horizontality, as noted in chapters two and three, are unsatisfactory at least in part because they fail to liberate themselves from these assumptions. Admittedly, a more comprehensive critique of the assumptions forms part of the accounts of Van der Walt and Thomas, which were discussed in chapter four. This section, therefore, will also engage with the similarities and differences in how the institutional approach and the approaches of Van der Walt and Thomas deal with these issues.

A. Sovereignty

The concept of unitary sovereignty plays a central role in the construction of the default vertical approach. The state’s monopoly over law-making powers - and thus, over the exercise of normatively sanctioned authority and coercion - enables the default vertical approach to posit it as a uniquely significant threat to core individual interests. It thereby justifies the limited application of the rights framework to the individual-state relationship.

In the previous chapter, we saw how Jean Thomas attempts to displace sover­eignty by asking what it is that is normatively significant about the relationship between the state and the individual that could be replicated in private relation­ships. We also saw, however, that by limiting herself to looking at the formal features of the state-individual relationship, such as the existence of a monop­oly, Thomas’s approach ends by partially collapsing back into the state action paradigm, where the enquiry returns to asking how much, or how closely, the private rights violator appears to formally resemble the state.^[471]

The institutional approach shares Thomas’s intuition that for a horizontal rights framework to be successful, it must grasp what is normatively significant about the state-individual relationship and limit the application of horizontal rights to private relationships that share those normatively significant features.

The institutional approach, however, takes a specific lens to the question of power. It is not every difference of power that attracts the rights framework (for example, a difference in physical strength that allows person A to assault person B, an offence under criminal law). Rather, the institutional approach consid­ers salient those power differences that flow from the parties’ relative locations within an institution. These power differences are characterised by the fact that they are structural and depersonalised, by their entrenched and enduring nature (which therefore goes beyond the individual characteristics of the private parties) and by the fact that the comprehensive nature of the institutions under discussion makes an effective ‘exit’ from the unequal relationship effectively impossible (or extremely difficult).

So, for example, in the first two cases discussed in the previous section, the institutions at issue were casteism and patriarchy (manifested through discrimi­natory access to schools and temples respectively). Both these institutions are ‘comprehensive’^[473] in the sense that they are not restricted to individual or one- off relationships, voluntarily entered into by otherwise unrelated parties, but are constitutive elements of contemporary society. Indeed, they affect all rela­tionships between individuals of different castes, or women and men, as the case may be. Something similar is at work in our classic example of racially restrictive covenants as manifestations of the institution of racism: while racism, casteism and patriarchy can be mitigated and potentially overcome through a long process of structural change (primarily in the domain of politics and society), an individual private party whose rights are violated because of an institutional difference in power can neither remedy the violation nor (feasibly) exit the institution.

This, therefore, allows us to note the crucial distinction between the institu­tional approach on the one hand and default verticality and Thomas’s approach on the other. Thomas, following default verticality, treats monopoly and no-exit as two sides of the same coin: ie people cannot exit because of the existence of a monopoly, and that is the crucial, normatively significant feature of the state-individual relationship from the perspective of the rights framework. The institutional approach recognises, however, there may be no feasible exit option even without any one private party exercising a monopoly. So, as we saw in the previous chapters, it is not as though the racist homeowner (or home-owning society party to the restrictive covenant) exercises a monopoly over the sale and purchase of all the homes that might be available to the buyer. Indeed, through some luck and the right contacts, some buyers may well find a non-racist home­owner in an equally ‘good’ neighbourhood, from their perspective.^[474] However, for the institutional approach, that is not the point; what is the point is that the racially restrictive covenant both manifests and is constitutive of the institu­tion of racism, and the permanent subordination of one group to another, from which there is no individual exit.

The radical break that the institutional approach makes with default verti- cality’s monopoly-based idea of sovereignty is visible most sharply in the final case that I discussed: PUDR. This is because ideas of monopoly are discussed primarily in the economic domain. Indeed, the US cases discussed in chapter two primarily turned upon the question of whether a particular firm or corpo­ration enjoyed a monopoly over the production and distribution of a good.^[475] But in PUDR, it was nobody’s case that an individual employer exercised a monopoly over hiring. Formally, therefore, workers were free to go elsewhere and bargain with any other employer for better wages.

Considered in formal terms, both parties [ie the labourer and the capitalist] were merely exercising their contractual freedom. Considered materially, one side was in a position to arbitrarily dictate terms, while the other could only accept these or perish. By this means, instead of a just reconciliation of interests, private terms of rule developed in the sphere freed from state rule, thereby enabling one part of society to exploit the other. (emphasis added)^[478]

Grimm’s use of the phrase ‘private terms of rule’ is particularly interesting, as it recalls the vocabulary of sovereignty while specifically discussing actions in the ‘private sphere’. Nor is Grimm the only one to draw this specific link: as I discussed in section IV, during the drafting of the Indian Constitution, BR Ambedkar specifically referred to ‘government’ by private employers.^[479] More recently, Elizabeth Anderson’s work - the appropriately titled Private Government - draws an analogy between the forms and extent of control exer­cised by states and employers from the perspective of the individual citizen or the employee, as the case may be.^[480] In other words, the concept of unitary - or monopolistic - sovereignty does not necessarily exhaust the range of features that make the individual-state relationship normatively significant from the perspective of the rights framework.

We are now in a position to understand how the institutional approach departs from default verticality’s normative construction of unitary sovereignty. According to default verticality, the rights framework applies to the state-indi­vidual relationship because of (inter alia) the monopolistic powers that unitary sovereignty grants to the state. This has sent courts and scholars in multiple jurisdictions on a hunt for private parties exercising monopolies as a necessary (although not always sufficient) component of horizontal rights application. The institutional approach, on the other hand, flips the focus from the formal characteristics of the state to the rights bearer, and asks (in the words of Ira Nerken) for a ‘review of the real options before the bindee’.^[481] Thus, under the institutional approach, while neither of the private parties to a relationship may be a ‘monopolist’ (in the formal sense of the term), it is the institutional back­ground that structures the relationship that is responsible for the absence of feasible exit options for the rights bearer. Corey Robin and Alex Gourevitch put the point pithily when they observe, in a discussion about the concept of freedom in the market, that although workers ‘are free to exit this workplace, they are not free to exit the workplace’.^[482] In other words, workers are essentially subjected to a monopoly without the existence of a monopolist.^[483]

Thus, insofar as there exists a ‘monopoly’ with respect to the rights bearer’s vital interests, it exists at the level of the institution, and not at the level of the private relationship. That is to say, the institutional approach accommodates an impersonal, or depersonalised, understanding of power.¹⁴⁸ It is in this manner that it liberates itself from the default vertical assumption of unitary sovereignty (and identifiable monopolies), which, in the final instance, rests on a personal­ised understanding of power. This also distinguishes it from Thomas’s model, and brings it closer to Van der Walt’s articulation of ‘differantial sovereignty’ (diffused throughout the horizontal domain), albeit without committing to this account of ‘social majorities and minorities’.

B. Abstract Freedom

As was the case with ideas of ‘monopoly’ and ‘exit’, the institutional approach articulates a broader conception of freedom. Grimm calls this ‘constituted free­dom’, and defines it as freedom that ‘can only be exercised within the context of social or state institutions’¹⁴⁹ (as opposed to freedom ‘whose exercise depends solely on the individual’s act of will’¹⁵⁰). Similarly, as part of his theory of ‘societal constitutionalism’, Sciulli lays an affirmative duty upon the state to guarantee autonomy within private institutions.¹⁵¹

This idea of ‘constituted freedom’, as articulated by the institutional approach, has two elements. The first is that it departs from default vertical- ity’s idea of abstract freedom, where the specific contexts within which private parties operate is deemed irrelevant. The institutional approach, therefore, makes common cause with the long-standing critique of the abstract ‘disem­bodied individual’, which has been at the centre of much legal thinking. As we saw in each of the three examples discussed above, markers of ascriptive identity such as gender, caste and class directly determine whether the rights framework will apply or not. In other words, an individual’s socioeconomic status, which speaks to their institutional location(s), must be taken into account in determin­ing whether freedom has been infringed in a normatively significant way.

Secondly, the institutional approach also adopts a broader understanding of the flip side of freedom, ie coercion or compulsion. As I showed in the discus­sion in the previous sub-section, the coercive character of the rights-violating acts at issue is obscured if we treat these acts in isolation (for example, person him whenever he thinks fit, as soon as he no longer gets any utility out of him, or not the anticipated utility. But the worker, whose sole source of livelihood is the sale of his labour cannot leave the whole class of purchasers, that is, the capitalist class, without renouncing his existence’. cf Mau, Mute Compulsion (n 12) 136.

¹⁴⁸ Mau, Mute Com-pulsion (n 12) 136.

¹⁴⁹ Grimm, Constitutionalism (n 1) 190.

¹⁵⁰ ibid.

¹⁵¹ D Sciulli, Theory of Societal Constitutionalism (Cambridge University Press, 1992).

The Institutional Approach and the Assumptions of Default Verticality 127 ‘A’ exercises their right over property to refrain from letting their house to person ‘B’). Consequently, the locus of the violation shifts from the actor to the insti­tutional context. Once again, this phenomenon was initially articulated by Marx, who memorably referred to ‘the dull compulsion of economic relations’ (as opposed to ‘direct force’) that characterised the ‘subjection of the labourer to the capitalist’ (emphasis added).^[484] More recently, as discussed in section II of this chapter, we find an analogy in contemporary discrimination law, which consciously eschews intentionality as a necessary feature of discrimination, focusing instead on discriminatory effect as a product of institutions, structures and norms.

C. Individual Responsibility

The manner in which the institutional approach departs from default verticality’s assumption of individual responsibility can be straightforwardly understood: the institutional approach rejects the vision of private individuals facing each other as abstract wills, who are presumptively equally responsible for shaping the terms of their relationship. Instead, like Thomas and Van der Walt’s models, the institutional approach denies that the private sphere is ‘horizontal’ in any normatively significant way, and takes seriously differences in power between private parties who face each other on formally equal terms.

The institutional approach seeks to go behind that formal equality and examine whether it masks a deeper ‘social coercion’, which flows from imper­sonal, institutional differences in power. In deciding which private relationships ought not to be classified as putatively ‘horizontal’, the institutional approach thus adopts a method that resembles Van der Walt’s model. It looks for situa­tions where ‘disputes between individuals... have social-political significance that extends beyond the relations of those involved’.^[485] In other words, the institutional approach resists what Nerken calls the ‘atomisation’ of private relationships.^[486] Of course, where the institutional approach departs from Van der Walt’s horizontal rights model is that it takes relative institutional location as the salient factor instead of the existence of social majorities and minorities.

The institutional approach’s departure from the assumption of individual responsibility resembles Laurence Tribe’s subjugation thesis, which I have already discussed.^[487] Recall that Tribe justified the judgment of the US Supreme Court in Shelley v Kraemer by arguing that racially restrictive covenants constituted acts

that were part of a broader pattern of keeping certain communities and groups in positions of subjugation. Later judgments would point out specifically - as discussed previously in this chapter - how racially restrictive covenants essentially amounted to private zoning, creating segregated neighbourhoods, where access to civic amenities was often also cleaved along racial lines. The basic insight remains the same: it is the institutionally mediated power difference between the two private parties that takes their relationship out of the formally ‘horizontal' domain, where each party is deemed individually responsible for shaping the terms of the relationship, primarily through the mechanism of contract. Instead, it requires, in the words of Van der Walt, a ‘re-horizontalisation'^[488] through the rights framework.

Tribe's argument brings us back to the difference between permanent and enduring hierarchies of power, which are mediated by structures and institu­tions (and which, in Tribe's account, are identified by the ‘subjugation' that they cause), and individualised differences in power, which are dealt with by various domains of private law (and therefore, as already seen, tend to have a knock-on effect on the practical application of indirect horizontality). The case of physi­cal assault has been discussed before; consider now the contract of adhesion, which authorises courts to rewrite or invalidate terms of a contract where a specific individual party is deemed to have exercised an unconscionable degree of power over another. This distinction operates as a principled limitation upon the horizontal rights framework under the institutional approach: not only must there be, as Jean Thomas points out, a valuable interest at stake (ie a right that the private duty bearer has the capacity to impact); but also, only those private relationships that are structured through an institutionally mediated difference of power are subjected to the horizontal rights framework.

A few corollaries follow. The first (which shall be explored more fully in the next section) is that the existence of an institutional background affects how competing rights between private parties are to be ‘balanced' in a horizontal rights analysis. Recall that one of the criticisms of both direct and indirect hori- zontality has been how, in making the ‘transplant' from the state as a duty bearer to a private party that is both a rights holder and a duty bearer, they ultimately require adjudicators (whether courts or legislative bodies) to perform an arbi­trary ‘balancing' exercise between the rights of both parties, by assigning relative weights to the competing rights at issue.^[489] The institutional approach both sets a limit upon the situations in which this exercise is required to be carried out (not every case of competing rights needs to be adjudicated within a horizontal rights framework), and affects the nature of the exercise itself. To go back to Aharon Barak's example of the racist house owner, the exercise now no longer requires balancing the right to privacy with the right not to be subjected to racial discrimination (which Barak resolves in favour of the former); rather, the very structure of the analysis is altered. Both the house owner’s duty and the renter’s right flow from their relative institutional locations vis-a-vis each other, in the context of their relationship.^[490]

Now, this account raises the immediate question: if the private duty bearer is not herself a monopolist, and if the normatively significant factor in affixing liability is institutional location (and not the individual action itself), then how do we justify pinning duties on the private party in question? In other words, if it is the institutional location, and not the private party themself, that is ‘respon­sible’ for the rights violation, why must that private party bear the burden of the obligation in question? We have seen that Thomas attempts to address this prob­lem by linking two private parties in a voluntary ‘undertaking’. For Thomas, the more powerful private party is deemed to have (in some way) consented to assuming certain obligations to the institutionally weaker party.^[491] In the previ­ous chapter, however, this formulation was criticised as being too restrictive, and it is not one that is open to the institutional approach. In this context, it should be noted that existing human rights law has already begun to depart from the notion of strict individual responsibility discussed above. For example, Fredman points out how the Public Sector Equality Duty under section 149 of the UK Equality Act shifts the focus from which party is morally responsible for a wrong to which party is in the best position to remedy it.^[492]

The institutional approach takes a similarly broad view of responsibility (noting, for example, that ultimately institutions are constituted by individual acts, even though they are not reducible to the sum of those acts), but also draws upon Fredman’s insight. So, to return to the old example of the racially restric­tive covenant: constitutional obligations are imposed upon the house owner in order to even out the institutional inequality that exists between him and the buyer. In other words, the obligation does not track individual moral culpability, but is designed to equalise the relationship between the parties, so that they can be genuinely said to face each other on a horizontal plane. This also frames, and limits, the remedies that can be enforced against private parties. These remedies (in this book’s examples, the invalidation of restrictive covenanting, the prohi­bition of denial of access to services, the obligation not to restrict the entry of women into the temple and the obligation to pay the minimum wage) all closely track the reason why the horizontal rights framework is applicable to the private relationship in the first place (the institutional imbalance of power). They are themselves limited to correcting for that imbalance.