rss_2.0Law and Business FeedSciendo RSS Feed for Law and Business and Business Feed of the Interest Limitation? Evidence from Germany: Adequate amount of interest expense in an enterprise and interest coverage ratio<abstract> <title style='display:none'>Abstract</title> <p>The tax deductibility of interest expenses is an issue for companies. However, the interest limitation rule may restrict the tax-effective deduction for interest expenses of a business to 30% of the EBITDA. The German Supreme Tax Court (BFH) has submitted the interest limitation to the German Federal Constitutional Court to examine its constitutionality (BFH I R 20/15; 2 BvL 1/16). Since the interest limitation has been introduced by European secondary legislation (Art. 4 ATAD; Anti-Tax-Avoidance Directive) in all EU Member States, and the German rule corresponds exactly to Art. 4 ATAD, the decision of the German Federal Constitutional Court (BVerfG) will have a great signaling effect. The unconstitutionality of the interest limitation rule may prevent important tax policy goals of limiting tax-related debt financing of businesses and corporations from being achieved. According to the BFH, the German Federal Bar Association and the predominant opinion in the German literature, the interest limitation rule violates the ability-to-pay principle under Article 3 (1) of the German Basic Law. However, the existing analysis falls short. An economic and legal analysis of the interest limitation shows that it does not violate constitutional law. Under constitutional law, the legislator may limit the amount of the tax-effective deduction of business expenses to interest expenses that are customary in the market. In doing so, the legislator can use recognized financial ratios, such as the interest-coverage ratio (ICR) that stands behind the 30% EBITDA limit. Constitutional law does not provide for an unlimited tax deduction of interest expenses.</p> </abstract>ARTICLEtrue the Effectiveness of Insolvency and Bankruptcy Code, 2016: Empirical Evidence From India<abstract> <title style='display:none'>Abstract</title> <p>The Indian insolvency regime has undergone a historic change with the introduction of the Insolvency and Bankruptcy Code, 2016. This paper empirically analyses the effectiveness of the Code in the Indian economy. The paper also studies the insolvency frameworks that existed in India, the distinguishing features, and the legal framework of the Code. The analysis of the current status of the Indian insolvency regime with time series and cross-sectional data clarifies the non-performing assets trajectory, recovery rates, and time required under different recovery mechanisms, a summary of cases under the new Code and the status of India in the international insolvency systems. The empirical evidence of this study suggests that the Code is an improvement over its predecessors in terms of recovery rates, resolution of non-performing assets, and resolution costs. The Code should be subjected to necessary improvements to evolve and become a foolproof mechanism. Suggestions to that effect are offered in the final section.</p> </abstract>ARTICLEtrue of Utility Models in Poland: A Brief History and Perspective for the Future<abstract> <title style='display:none'>Abstract</title> <p>This paper concerns mechanisms for the protection of utility models in Poland. These mechanisms are at present on the verge of substantial change as a new draft regulation was opened for public consultation in 2022. Select results of analyses of the utility model applications filed in the years 2001–2020 were reported. The analyses concerned possible routes for filing utility model applications in Poland, the most popular fields in which utility model protection is used, and the origins of utility models protected in Poland by the country of residence of the first applicant. It has been noted that a key strength of the utility models is the criteria granting exclusive rights. In terms of the advantages related to disclosure, the state-of-the-art protected utility model needs only to be novel; there is no requirement concerning the inventive step. This makes the assessment of validity relatively reliable and significantly reduces the risk that the enforced right of protection will be invalidated. This strength will likely be preserved in the review of the draft regulation that is about to abolish substantial examination and replace it with a registration system. The change is supposed to reduce the time of prosecution, thus making the conversion from refused/withdrawn European patent applications to Polish utility models more attractive.</p> </abstract>ARTICLEtrue of Causal Nexus in Rule 10b-5 Claims: A Critical Reassessment<abstract> <title style='display:none'>Abstract</title> <p>Investors are entitled to assume that issuers comply with regulatory disclosure requirements and have therefore purchased or sold a security at a price expected to have been set without being affected by untrue statements or omissions. That is, investor reliance should be presumed in a regulated market in which the issuer statements in SEC filings are truthful and at least not seriously misleading. This article argues that the source of reliance lies in the credibility of the regulators committed to promoting market integrity and investor protection. In this regard, the basic presumption per se remains valid but needs some revision. Furthermore, in assessing claims of causation of loss and damages, it should be taken into account whether any significant price distortion occurred at the precise moment when defrauded investors made investment decisions, not at a later date. Such ex-ante analysis is theoretically sound and consistent with legislative intent.</p> </abstract>ARTICLEtrue the Editorial Board Future of Judging: Algorithms in the Courtroom<abstract> <title style='display:none'>Abstract</title> <p>These keynote lecture notes explore the potential and limitations of using algorithms and machine learning tools in the courtroom. It identifies different areas in which algorithms would be suitable for legal decision-making and areas in which human judgments should be preserved.</p> </abstract>ARTICLEtrue Moral and Legal Status of Artificial Intelligence (Present Dilemmas and Future Challenges)<abstract> <title style='display:none'>Abstract</title> <p>The rapid development of artificial intelligence (AI) systems raises dilemmas regarding their moral and legal status. Can artificial intelligence possess moral status (significance)? And under what conditions? Can one speak of the dignity of artificial intelligence as the basis of its moral status? According to some authors, if there are entities who have the capacities on which the dignity of human beings is based, they would also possess intrinsic dignity. If dignity is not an exclusive feature of human beings, such status also could be recognised by artificial intelligence entities. The first part of the paper deals with the problem of moral status of artificial intelligence and the conditions that must be fulfilled for such a status to be recognised. A precondition for the existence of moral status of artificial intelligence is its ability to make autonomous decisions. This part of the paper considers whether developing autonomous AI is justified, or, as some authors suggest, the creation of AI agents capable of autonomous action should be avoided. The recognition of the moral status of artificial intelligence would reflect on its legal status. The second part of the paper deals with the question of justifiability of ascribing legal personhood to the AI agents. Under what conditions would recognition of legal personhood by the artificial intelligence be justified and should its legal subjectivity be recognised in full scope or only partially (by ascribing to the AI agents a “halfway-status,” as some authors suggest)? The current state of the legal regulation of artificial intelligence will be observed as well.</p> </abstract>ARTICLEtrue“Just” Algorithms: Justification (Beyond Explanation) of Automated Decisions Under the General Data Protection Regulation<abstract> <title style='display:none'>Abstract</title> <p>This paper argues that if we want a sustainable environment of desirable AI systems, we should aim not only at transparent, explainable, fair, lawful, and accountable algorithms, but we also should seek for “just” algorithms, that is, automated decision-making systems that include all the above-mentioned qualities (transparency, explainability, fairness, lawfulness, and accountability). This is possible through a practical “justification” statement and process (eventually derived from algorithmic impact assessment) through which the data controller proves, in practical ways, why the AI system is not unfair, not discriminatory, not obscure, not unlawful, etc. In other words, this justification (eventually derived from data protection impact assessment on the AI system) proves the legality of the system with respect to all data protection principles (fairness, lawfulness, transparency, purpose limitation, data minimisation, accuracy, storage limitation, integrity, and accountability). All these principles are necessary components of a broader concept of just algorithmic decision-making and is already required by the GDPR, in particular considering: the data protection principles (Article 5), the need to enable (meaningful) contestations of automated decisions (Article 22) and the need to assess the AI system necessity, proportionality and legality under the Data Protection Impact Assessment model framework. (Article 35).</p> </abstract>ARTICLEtrue Artificial Intelligence in a Brave New World—A Glimpse from Europe<abstract> <title style='display:none'>Abstract</title> <p>There is no area of human activity that would function today without the involvement of AI technologies. AI, a driving force of the Fourth Industrial Revolution, penetrates modern human life with ever-increasing intensity. As it is claimed, it brings about decision-making efficiency and performance accuracy that has never existed before. At the same time, artificial intelligence creates far-reaching dangers to almost every aspect of the modern world. From the legal point of view, the most eminent ones include: the bias stemming from the inherited historical data that AI tends to repeat and multiply, the problem of the lack of transparency (the “black-box society”) that makes it impossible for a human being to understand how AI arrived at a decision, and the elimination of the human being from the decision-making process, which rises the issue of appropriateness and legitimacy. AI can only be developed when sufficient amount of data is available, and hence the article elaborates on the fundamental role that data plays for the modern world, and how transnational corporations set global rules in relation to collection and access to data in a process that lacks democratic accountability and questions the position of states. The article ends with presenting the UE attempts to address the issues that arise in relation to the unrestricted access to data, invasion of privacy and threats posed by artificial intelligence. It also elaborates on the prominent position that the artificial intelligence holds on the EU political agenda and presents political and legislative actions undertaken by the European Union in this regard.</p> </abstract>ARTICLEtrue on the Use of AI in the Legal Domain<abstract> <title style='display:none'>Abstract</title> <p>This paper examines the field of Artificial Intelligence (AI) and Law and offers some broad reflections on its current state. First, the paper introduces the concept of AI, paying particular attention to the distinction between hard and soft AI. Next, it considers how AI can be used to support (or replace!) legal work and legal reasoning. The paper goes on to explore applications of AI in the legal domain and concludes with some critical reflections on the use of AI in the legal context.</p> </abstract>ARTICLEtrue the Editorial Board in the AI World<abstract> <title style='display:none'>Abstract</title> <p>AIs’ presence in and influence on human life is growing. AIs are seen more and more as autonomously acting agents, which creates a challenge to build ethics into their design. This paper defends the thesis that we need to equip AI with artificial conscience to make them capable of wise judgements. An argument is built in three steps. First, the concept of decision is presented, and second, the Asilomar Principles for AI development are analysed. It is then shown that to meet those principles AI needs the capability of passing moral judgements on right and wrong, of following that judgement, and of passing a meta-judgement on the correctness of a given moral judgement, which is a role of conscience. In classical philosophy, the ability to discover right and wrong and to stick to one's judgement of what is right action in given circumstances is called <italic>practical wisdom</italic>. The conclusion is that we should equip AI with artificial wisdom. Some problems stemming from ascribing moral agency to AIs are also indicated.</p> </abstract>ARTICLEtrue