Whether consumer law should address inequality has been approached from different perspectives in Latin America and Europe. EU consumer law has primarily relied on the interpretive benchmark of the average consumer, leading to a model of “empowerment through information” in service of maximum harmonization and economic integration. In Latin America, by contrast, statutes emphasize consumer protection based on the paradigm of the vulnerable consumer, leading to more robust substantive protection in addition to classic disclosure rules. This chapter compares the EU regime to the heterodox approach of Argentina, where courts have embraced the task of using consumer protection law to reduce inequality. Moreover, a recent Argentinean reform introduced the category of the hyper-vulnerable consumer to provide enhanced protection to consumers in a situation of aggravated vulnerability due to age, gender, physical or mental state, or social, economic, ethnic, and/or cultural circumstances. The chapter also discusses the prospect of reverse convergence (i.e., EU law converging to the Latin American mode) in view of European scholars’ growing call for the recognition of “structural vulnerabilities” in the context of the digital economy, which happens to be dominated by US companies.

How do private law institutions of developing countries differ from those of developed countries? A common view is that the legal systems of the Global South are often outdated, failed transplants of Global North models, or plagued by enforcement challenges. This book project offers a different perspective by focusing on legal innovation and adaptation in the Global South. We examine how countries in the Global South have embraced legal doctrines and solutions that deviate from approaches that currently hold the status of orthodoxy in richer countries, and pursue distinct and potentially broader public policy objectives or reflect different values, in response to conditions that are commonplace in developing countries. Our analysis points to reasons why the legacy of colonialism, limited fiscal capacity, economic dependence on richer countries, and macro-economic volatility may encourage lawmakers in poor countries to develop heterodox doctrines. We explore different manifestations of legal heterodoxy across various areas of private law in a range of countries in the Global South. Recognizing legal heterodoxies in the Global South enlarges our understanding of legal experiences and possibilities, and contributes to our understanding about the driving forces and direction of legal evolution around the world.

India’s landmark corporate law reform in 2013 contained a pioneering attempt to mandate corporate spending of 2 percent of average profits on corporate social responsibility (CSR) initiatives. This chapter explores a puzzle: The CSR requirement could have been written as a CSR tax rather than a CSR spending requirement, so why did the government choose the latter, more heterodox, option? The analysis suggests that the motivation for the reforms reflects a blend of political optics and state capacity or efficiency considerations informed by historical experiences with market-oriented reforms. On the efficiency and state capacity front, the Indian state might not have been as well placed to enforce a CSR tax as Indian firms might have been able to manage a CSR spending requirement in 2013. On the political optics side there was a prevailing perception that the liberalization had primarily benefited only a very small sliver of the country. If corporations were engaged in CSR then it might look like the gains from economic liberalization were beginning to find their way from India Inc. to the general citizenry. This blended account provides interesting insights about this rather unique set of reforms and subsequent developments.

Prevailing stereotypes depict the corporate laws of developing countries as either antiquated or plagued by problems of enforcement and misfit despite formal convergence. This chapter offers a different view by showing how Global South jurisdictions have pioneered heterodox stakeholder approaches in corporate law. Examples of those approaches include the erosion of limited liability for purposes of stakeholder protection in Brazil and India, the adoption of mandatory corporate social responsibility in Indonesia and India, and a large-scale program of Black corporate ownership and empowerment in South Africa, among many others. By incorporating broader public policy and distributional objectives into corporate law, heterodox stakeholderism can be interpreted as an institutional adaptation to a context of high inequality and externalities that remain unaddressed through other areas of law. As the rise of inequality and growing distrust of the state’s ability to tackle social and environmental concerns have brought the Global North closer to the Global South’s realities, the resurgent interest in stakeholderism in the developed world constitutes a surprising form of “reverse convergence” that merits greater attention. Heterodox stakeholderism in the Global South also responds to critical, but heretofore neglected, distributional implications of corporate law rules.

The COVID-19 pandemic threatened to worsen pre-existing economic inequality in China. This chapter discusses how the Chinese party-state used distinctive “ultra-heterodox” measures to alter or nullify contractual terms in contractual disputes during the pandemic that raised serious concerns about inequality, social unrest, or systemic financial risk. Specifically, courts would refer such disputes to either mediation, insolvency, or a “macro-prudential” proceeding that involved courts collaborating with government agencies, party officials, and stakeholders of firms experiencing financial distress to negotiate and implement resolutions of disputes. These procedures allow the party-state to achieve its objectives of preventing market disruption, social unrest, and financial crisis triggered by unfair and unequal contracts. The “negotiated legality” reflected in these measures works in China because of the dominance of the party-state, widespread acceptance among contracting parties of a communitarian understanding of liability and responsibility, and the efficiency of postponing risk allocation to the enforcement stage from the contract formation stage in an emerging market.

In 2021, the Brazilian Supreme Court issued a landmark decision which declared that a portion of Section 40 of the Brazilian Patent and Trademark law violated the constitutionally enshrined right to health. The challenged provision automatically extended the terms of certain patents for up to ten years, a much longer period than permitted under any other patent regime in the world. It was adopted following lobbying from foreign pharmaceutical companies over the objections of local elites. The impugned provision qualified as an example of ultra-orthodoxy, defined here as the adoption of radically neo-liberal legal institutions in developing countries as a result of the lobbying efforts of industries with substantial economic power. The ruling by the Brazilian Supreme Court merely brought Brazilian law into line with the TRIPS agreement, the benchmark for legal orthodoxy. At the same time, the ruling was heterodox in several respects, including the interpretation of the right to health as a collective human right, the value given to independent academic opinions, and the attention paid to comparative law, particularly involving other countries from the Global South. It remains to be seen whether backlash against the decision will mute its potentially beneficial distributive effects.

Chinese courts routinely ask defendants to pay damages without evidence of negligence while relying on concepts such as fairness, substantive justice, or discretion. This chapter examines how Chinese courts arrive at decisions that feel fair or just in cases where they refer to those ideas. Analysis of a dataset of 10,000 judicial decisions in personal injury cases suggests that Chinese courts refer to these concepts when they impose liability on two types of parties: (1) participants in a shared activity and (2) those who control a physical space. By assigning legal responsibility in these cases, Chinese courts acknowledge traumatic harm, spread economic losses through communities, and, when they award substantial sums, act as agents of redistribution. These practices survived the 2021 adoption of the Civil Code, which reduced courts’ discretion to impose equitable liability in tort cases. This study therefore points to several potentially distinctive features of China’s embrace of legal heterodoxy in tort law. Those features include the ongoing influence of China’s socialist and pre-revolutionary legal traditions, divergence between legal provisions and legal practice, and the possibility that heterodox practices will serve bureaucratic interests and Party-state goals along with other social policy goals.

Does contract law have any role to play in tackling economic inequality, one of the most pressing problems of our time? The orthodox answer to this question is no: contract law should promote autonomy, efficiency, and/or justice in exchange, while distributive objectives should be dealt with exclusively through the fiscal system. Critics of this orthodoxy struggle with the prevailing understanding that contract law around the world has converged on doctrines that are insensitive to distributive considerations. This chapter contributes to this debate by showing how courts in South Africa, Brazil and Colombia prominent Global South countries from different legal traditions – have recently diverged from orthodoxy to embrace the task of using contract law to address inequality. The emergence of contract law heterodoxy in Global South countries draws attention to the existing, if more limited, instances of heterodoxy in the contract laws of the United States and Europe and to the stakes of contract law more generally. This analysis highlights how mounting inequality may increase the appeal of contract law heterodoxy and suggests that the present reign of contract law orthodoxy is neither universal nor inevitable.

Brazil and the United States adopted contrasting approaches to protection of tenants against eviction during the COVID-19 pandemic. In the United States, the legislature adopted protective measures for tenants early in the pandemic that were later overturned by the Supreme Court. In Brazil, the legislature failed to adopt significant protective measures during the early phases of the pandemic; the first important protective measure was an interim decision of Brazil’s Supreme Court handed down over one year after the beginning of the pandemic. In this sense, Brazil’s overall approach was heterodox while the approach in the United States was orthodox. At the same time, the actions of the Brazilian legislature and executive branch were highly orthodox, based on the argument that measures that served to protect tenants might harm vulnerable landlords. In fact, economically vulnerable tenants are likely to be much more common in Brazil than economically vulnerable landlords. This episode shows that a heterodox system may contain orthodox institutions that deny the distributional potential of private law. It also shows that a heterodox system may be less effective than an orthodox system at enforcing social rights.