Adversarialism versus legalism: Juridification and litigation in corporate governance reform

Recent reforms of corporate governance law and related litigation rules in the US and in Germany indicate that reports of the spread of adversarial legalism are greatly exaggerated. Politics and legislation in the US since the mid-1990s have turned quite decisively against shareholder litigation even as corporate governance and securities law reforms have expanded the role and scope of the regulatory state. Germany's extraordinary expansion of financial and corporate governance regulation since the early 1990s exemplifies juridification. Although these reforms included some liberalization of shareholder litigation rules, the changes reflected skepticism towards private litigation and imposed new constraints on the most prevalent forms of shareholder suits. Marketization of economic relations and the era of finance capitalism have produced far more legalism than adversarialism, more regulation than judicialization, and more ex ante transparency rules than ex post litigation remedies.