sou · GQB3112 · 2003-01-01 00:00:00 — In this way the risk of ups and downs has shifted from the company to the free agents shoulders. Balancing between the corporate need of flexibility and the workers need of employment security will in this situation be subordinated to the joint efforts for both to gain by the construction. In this situation there is a need for legal changes and innovations. The background is the following. 2 From natural law to legal positivism 2.1 The example of juridical persons When the industrial society in the 19th century entered a phase of large-scale production, the legal system faced a number of chal- lenges. The need for accumulation of private capital for the growth of large companies called for an introduction in the legal system of a new kind of person. There was an interest of limited liability among the owners in order to stimulate the industrial growth. This created in the mid-19th century a tension within the legal doctrine surrounding company law. 2Martin Carnoy, Sustaining Flexibility: work, family, and society in the information , , MA: 2000. 3Daniel H. Pink, Free Agent . How New Independent Workers Are Transforming the of Life, : 2001. Until that time some companies could be granted limited liability as a privilege given by the state. This system can be traced back to the in the beginning of the 17th cen- tury. Limited liability was at that time related to public law and not company law within the civil law system. The associations that existed until the mid-19th century were treated in the per- spective of the legal doctrine about persons as , using the Roman law term. expressed a relation of law of con- tracts among the participants. The company relation, however, constituted a community based on the law of property (com- munio). This transition took a long time to complete.4 The natural law theory had to be substituted by legal positivism. As long as persons were observed through the scheme of , supra-individual persons could not find their place within the legal system. The first step in the transition was to think about a company in terms of a person with its own legal capacity built on the parallel to natural persons, individuals. Companies could be seen as juridical persons. This fiction started with an acceptance of juridical persons not being a person ac- cording to the commonly known criteria of persons but still use- ful in order to place the phenomenon within the legal system. The process of change in legal systematising was initiated by making analogies between natural and juridical persons. But there are differences. Juridical persons cannot feel and act as such. They do not exist in the natural world. In other words, they are fictitious. In this situation there was a need for legal constructions. Parallels with natural persons were no longer enough. The juridi- cal person had to have its own existence within the legal system. This called for an expansion of the cognitive scope of legal per- ceptions. The law had to change its relation to its environment. Legal concepts had to be based on legal positivism instead of natural law. The difference is that of going from linear explana- tions of legal concepts to recursive arguments. The definition of law became circular as a consequence of legal positivism. is created out of law. There is for legal positivism no such thing as natural rights or natural persons. The cognitive effect of the cir- cular model of explanation instead of the linear is the increased variation and flexibility. Legal positivism, by breaking with natural law thinking, opened up for legal constructions. It was only by making a dis- , Rättssystemets lärande. (The Learning Capacity of the ) Diss., : 2002 (in press). tinction between natural and juridical persons that the fiction of supra-individual persons could become redundant. Society is re- garded as separated from nature and law regulated society. had become the positive law, which responded to and actually changed with societal development. The discovery in the legal system of its own sovereignty made the legal fiction possible as an arbitrary legal construction so long as it provided functional solutions in society. This acceptance of the fiction opened the way to new ways of projecting social systems in legal terms. The topology of legal theory was changed in an almost paradigmatic . The construction of the juridical person represents the association of co-operating individuals and thereby substituting what was earlier understood in terms of relations among the same individuals. Thus, the concept of juridical person was not created by the state and the political system, but by the legal system. Also the state is a legal category and constructed by the law. By the inno- vation of the juridical person, the legal system has been able to bring forth a theory of persons that has had revolutionary impli- cations in society. Within the legal system, as a consequence, an almost exponential growth of norms has taken place. The legal system has through many cognitive innovations and a capacity for learning expanded its ability to observe its environment and thereby successively provided more effective structures as the need arose. The creation of the innovation is in most cases, as in this one, a question of a long process with many influences. With the concept of juridical person, the legal system both expanded its capacity to observe changes and developments in society and was able to retain and develop existing (Roman law) legal doc- trines. The concept of juridical person made the expansion of large-scale industrial society possible. Companies got an identity of their own and as legal constructions became power centres with a rationality which goes beyond the interaction of the co- operating individuals. These social and legal changes could take place without alterations in legal reasoning. 2.2 The example of collective agreement A similar problem in relation to the growth of the large-scale in- dustrial society was the need for a collective agreement in order to create self-regulative mechanisms on the labour market. The problem was if the collective agreement could be legally ac- cepted. Even if the perception of contract was decisive when the collective regulation of working conditions via trade unions emerged, it was not given that the legal system could accept col- lective agreement as a contract in a private law sense. Could rules of contract and claims be applied to collective agreements? The nearest analogy was to treat collective agreements as recip- rocal binding contracts, but the law of contract and torts, based on Roman law, was too individualistic to fit the purpose of la- bour market regulations. The main problem was that contracts only had legal consequences for the parties directly involved. The personal will was conclusive; personal contracts could break through collective agreements. Another important aspect was about the binding force of the collective agreement. To be effec- tive it had to be binding not only on the contracting parties, the organisations, the employers and the employees, but on the members in the trade unions as well. At the time of the growth of collective agreements in prac- tice, in the late 19th and early 20th century, legal positivism, as we have seen, already had been established in legal thinking, and the lawyers gradually came to accept collective agreements as a legally binding contract with adequate legal consequences. By use of legal constructivism, collective agreements were given a special status with priority over individual contracts and they also became exceptional in having binding force even for those not being directly parties to the contract. 3 From legal positivism back to natural law design. The example of self-employed When someone buys job performance, they use a labour contract. This can in its turn within the Swedish legal tradition be subdi- vided into two forms of contracts, contract of employment and contract of commission. Collective agreements complement the contract of employment in determining the working conditions, while in the contract of commission the parties to the contract have to decide on what has to be done and under what conditions in terms of payment, etc. The question is if work by a self- employed should be regulated by a contract of employment or of commission. In the present situation the answer is that if you per- form the work in terms of an individual, natural, person, the work relation is regarded as employment, and if you do it as a juridical person and/or private firm it is regarded as contract of commis- sion. In the first place you are regarded as an employee and in the second as a business firm. In the latter case you have to bear the burden of payroll tax and social security charges as if you are an Being self-employed, you are from a legal point of view either an employer or an employee; actually, you are some- thing in between. The legal system does not accept a natural person perform- ing a job without being employed. If you would like to be self- employed, you have to be employed within your own firm. The structures supported by legal positivism have in our time created a mentality and a legal superstructure that create new paradoxes. What from a natural law perspective appears as the most natural thing, namely for an individual to conclude an agreement about work without being regarded as a juridical person or a firm, is in the positivistic era of law not possible. The legal constructions void it and force the work into the black market. In order to bring the phenomenon back into the acceptance of the legal system, a deregulation has to take place within company law and tax law. The contract of commission is an existing and a relevant le- gal institution for regulating the work of self-employed. There is, though, a need within tax law for getting rid of the fiction of the self-employed being a firm and thereby the fiction of the self- employed being an employer, a specific fiscal subject. The self- employed could fairly well pay tax on the income he gets for his work but, since he is organising his own work, be free from overhead costs. In order to match the practical needs of the in- formation society, the mental structures of legal positivism first have to be replaced by the natural law construct of self- employed. A person is a person who is capable of concluding a contract of commission on his own. Electronic Plumbing – the Like any other human activity, computing and networks of com- puters need access to space on the ground, in this particular case for wires, optical fibres or even radio masts and transmitters. Whenever such need is to be satisfied, the IT-world has to face the old problems of access to land by contract or by various forms of expropriation – IT law meets real estate law. This paper will discuss some of the problems that have transpired in this junction of legal structures. to the particularities of different legal systems, the problems may concern different aspects in various countries, although the basic issues remain the same. In this paper, however, Swedish law will be the main subject of dis- cussion. The basic requirements of operators of electronic services and owners of such networks are the same as for all commercial activities, i.e. the property concerned must be the subject of clear ownership and be made subject to normal commercial transac- tions – the rights to land should be secured, the property should be eligible as collateral for loans, it should be possible to lease it, etc., and such transactions should of course be protected under property law. Unfortunately, this is easier said than done under real estate law as far as the physical components of such networks are con- cerned. First, Swedish law has not even considered many of the issues, e.g. leasing a pair of optical fibres in an optical fibre ca- ble, until now. Secondly, much of the applicable legislation has been created with the needs of public utilities companies in mind. Therefore it is adapted to the needs of publicly owned, de facto monopoly enterprises, having regard for the more commer- cial aspects referred to above. Therefore, the fundamental prob- lem concerns the adaptation and reshaping of old legal structures is a professor of private law, specialising in real es- tate, valuation, and law, at the , Univer- sity, and (). His publications include works on housing law and real property as well as labour law. For the IT he has written reports on the legal aspects of the physical infrastructure of the information society. to new needs created by new applications in combination also with privatisation and deregulation of the old monopolies. 2 A note on legal development of access to land for electric and telephone cables and wires Like many other European jurisdictions, Swedish real estate law operates under the numerus clausus principle as far as property rights to land are concerned. Only certain contracts with regard to right to land are awarded property law effects. Since personal easements are not recognised under property law in , the contract by which electrical companies have secured the right to land has traditionally been easements in which the power station was the dominant real estate unit. The Swedish National Tele- communications Agency () was not able, however, to use such a method, since it was considered that no proper domi- nant real estate units were to be found. Consequently the was left forced to use the contract form of (partial) right of use. This contract, however, was much less suitable than the easement, primarily because it could only be made for a lim- ited period of time – 25 years in areas subject to detailed plan- ning, i.e. densely populated areas, and 50 years in other areas. In fact, the privatised Swedish company now faces severe problems because thousands of contracts for base stations are on the verge of running out or have already done so, not to mention hundreds of thousands of contracts for telephone cables and wires. In order to remedy the situation new legislation was enacted in 1973 – the Act on cables, wires and conduits (Ledningsrättsla- gen, hereinafter referred to as the Utility Easements Act)1. This Act is a simplified version of the Expropriation Act, and it has a narrow area of application. It applies only to certain kinds of ca- bles, wires and conduits, which are used for certain purposes. Moreover, it must be construed narrowly, because it has an ex- propriative character. It devises a particular land-surveying pro- cedure whereby land can be taken for the of such property. The landowner is given compensation for the infringe- ment according to the principles of the Expropriation Act. As a result, a certain right is awarded to the owner of the cables, etc., ledningsrätt (which accordingly may be referred to as a utility The terminology is problematic here. The Swedish word ledning means conductor or conduit in the general sense of the word, i.e. any- thing that leads electricity, air, liquids, etc. It can properly be regarded as a personal easement created by expropriation-like proceedings. , it is not lim- ited in time and, moreover, it cannot be touched by any private law actions, short of an agreement between the holder of such a right and the owner of the land that the right shall cease to exist. In fact the protection is stronger than any protection given by property law rules. – To be sure, land can also be expropriated for the same purposes as the Utility Easements Act, but the ex- propriation procedure is much more expensive and time- consuming. However, the Utility Easements Act, as already indicated was created with a view to the needs of public utility companies. Even recent amendments have been made in accordance with this inclination of the Act. This, coupled with the narrow field of ap- plication of the Act creates problems for the IT infrastructure and that is the subject of the following discussion. Much of what will be said is subject to litigation and heated discussion in , mainly for three reasons. First, the landowners request more compensation than is given under the Utility Easements Act. When a new IT infrastructure is built it is no longer a matter of public utilities, they claim, but of profit-making business. Sec- ondly, the of the 3-G mobile telephone network is under way and must be finished before the end of 2003. The shortcom- ings of the Utility Easements Act must not stand in the way. Thirdly, it is not unlikely that one or more of the owners of com- puter networks will go bankrupt sooner or later, and by then a number of property law issues should have been straightened out. 3 The coverage of the Utility Easements Act The Utility Easements Act is purposely restricted to cables, etc., of a certain kind, used for a particular purpose. In this context the relevant statutory text (sec. 2, para. 1) indicates that the Act ap- plies to a telephone line included in a telecommunications sys- tem for public use and [also] a public low voltage line for signal- ling, remote control, data communication or some similar pur- pose. From this definition it is immediately clear that it is doubtful whether optical fibres are at all covered by the Act, since they certainly are not electrical in the normal sense of the word – they are indeed conductors, but of light, not electricity. Curiously enough, this particular angle of the problem has never been tested. And the reforms of 2001 certainly put a stop to the discus- Those reforms made it possible for electrical power compa- nies to hang fibre optical cables in their existing power line py- lons and distributing poles without obtaining a new or extended permit. Recently, however, a more serious problem has surfaced. It concerns the radio masts for the cellular phone system. These masts are not interconnected by way of electrical cables or even fibre optical cables at all – they communicate with the various base stations by way of radio signals. However, the operators in- sist that the rights to such masts be protected by way of utility easement. In order to solve the problem, the land surveying au- thority has come up with a perhaps too ingenious solution: the masts themselves and the receiver-transmitter equipment are to be regarded as cables under the Act, since they are part of an integrated communications network. The matter is now a subject of litigation, but it is not unlikely that the Swedish Parliament will have to intervene by way of new legislation so that the of the networks is not bogged down in the courts. The present authors main observation is only that the dis- cussion serves to illustrate the difficulties involved in adapting old legislation to new technical development. The main mistake of the framers of the Utility Easements Act was to restrict it to certain kinds of cables, wires and conduits. 4 Using existing infrastructure for fibre optical cables The Swedish legislator has wisely assumed that the most efficient way to propagate fibre optical cables is to use existing infrastruc- ture, i.e. mainly roads and power pylons. As far as public roads are concerned, the technique is quite simple, since the Roads Act allows the road owner (the Road Administra- tion, a government agency) to sublet space in the road bank for various purposes. Unfortunately, the landowners are not very happy about this. The right of road is formally a right of use, similar to the utility easement, and the landowners naturally want part of the compensation the road owner stipulates for granting such a subletting of space. As far as power pylons are concerned, new legislation has been introduced. As already indicated, a new section (3 a) of the Utility Easements Act prescribes that holders of utility easements for electric power lines are entitled to use the space also for tele- phone wires and other electric wires for signalling, etc., accord- ing to sec. 2 (1) of the Act (cf. This solution is problem- atic for several reasons. First, it becomes impossible for the electrical power com- pany to transfer the optical fibre cable without at the same time transferring the power cable and the utility easement. The Act expressly prescribes that the cable cannot be transferred without the utility easement. Secondly it becomes impossible to use the fibre optical ca- ble alone as security for credit. The security must, for reasons just indicated, consist of the utility easement plus the power cable and fibre optical cable. Thirdly, the new legislation presupposes that the whole power line is secured by way of utility easement, but this is not always the case. commonly, the power line is only partially secured in this way, whereas the remainder may be secured by an ordinary contract of easement. If the latter is the case, the power company cannot transfer the power line or the fibre optical cable at all without transferring the dominant real estate unit. Fourthly, it is certainly possible to lease the fibre optical ca- ble to an external party, but it is difficult to say what kind of a lease it is. A power line may partly be regarded as real property – this is the case when it is protected by means of a contract of easement or when the utility easement has been declared a fixture to real estate (sec. 1 of the Act). In such a case a lease of an opti- cal fibre cable is to be regarded as lease of real property (Ch. 1 of the Land Code). If this is not the case, the utility ease- ment as well as the cables is to be regarded as a movable. The rules, particularly as regards property law, are entirely different depending on how the property is classified. In the opinion of the current author this complicated situa- tion requires a better solution. One possibility is to create a new legal figure for the lease of fibre optical cables, for instance a by giving the owner of the utility easement a possibility to create a personal easement in that right. Another possibility is to provide regulation of such leases along the same lines as leases of real property, regardless of its character of fixture or movable. The details will not be elaborated here. The same solution could apply also as far as lease of space in roads is concerned. However, the situation is clearer here, since the right of road is technically a movable. 5 Lease of dark fibre A fibre optical cable may consist of hundreds of pairs of fibre op- tical wires. Many enterprises are interested in leasing one or sev- eral of such pairs for their own particular use, thus excluding any one else from using them. It is, however, difficult to conceive of a situation where such pairs are transferred with property law ef- fects – the pairs of fibre optical wires cannot be separated from the cable without being destroyed. They can, however, be effec- tively individualised and marked. The question is what kind of protection one wishes to be- stow upon such a lease. If the cable is to be regarded as a mov- able, legal protection in the event of transfer of the cable is non- existent, short of a claim for damages against the transferor for not reserving the right of use, as is the safeguard in the event of the cable operator going bankrupt. On the other hand, if the cable is to be regarded as a fixture, extensive protection is given in such a situation. In the present writers opinion, the interests of enterprises that have leased dark fibre deserve extensive protec- tion, regardless of whether the property should be regarded as fixture or movable. These interests primarily consist in the right to use the property on a continuing basis, so as to guarantee com- puter communications in a safe way. For many enterprises this interest is as essential as the leasehold of office space in a build- ing. 6 Co-ordinating the interests of several users