Proactive Law and Proactive Contracting

Proactive law provides tools and techniques for the early detection and prevention of potential problems, but goes beyond these. If problems do arise, the approach offers mechanisms to resolve them quickly, before they develop into disputes. Still the focus is not just on preventing problems or “legal ill-health”. The goal is to promote “legal well-being”. In contracting, this calls for business-friendly contracts that work as managerial instruments, helping the parties achieve the objectives of their collaboration and succeed together.

Our work is firmly rooted in Proactive Law and Proactive Contracting. Along with improved contract risk management, we look for ways in which contracts and the law can be used to reach better outcomes and relationships.  The first publication related to the topic was ”Quality Improvement through Proactive Contracting: Contracts are too important to be left to lawyers!”, a conference paper presented by Helena Haapio at the Annual Quality Congress of the American Society for Quality (ASQ) held in Philadelphia in 1998. The paper was later expanded to an article entitled “Preventive Lawyering in International Sales: Using Contract Reviews to Integrate Preventive Law, Risk Management, and Quality” published in the Winter 1997/1998 issue of the Preventive Law Reporter.

The Nordic roots of the proactive approach

The Nordic School of Proactive Law (NSPL) was established in response to a need to further develop practically oriented methods and legal theories of Proactive law. It consists of both practitioners and researchers engaged in Proactive law in each Scandinavian country. The NSPL website contains information about the background, people, and past and future events.

The first international Conference dedicated to Proactive Law, “Future Law, Lawyering, and Language: Helping People and Business Succeed”, was organized in Helsinki, Finland, in May 2003.  The conference sessions were graphically recorded by Annika Varjonen. Conference papers were published in the Summer 2003 issue of the Preventive Law Reporter. Since then, a number of Proactive Law conferences have been held.

The second international Proactive Law Conference, “Fusing Best Business Practices with Legal Information Management and Technology”, was organized in Stockholm, Sweden, in June 2005. Conference papers were published in Volume 49 of the Scandinavian Studies of Law Series, “A Proactive Approach” (Ed. Peter Wahlgren). The Volume includes, i.a., two Chapters by Helena Haapio: “Introduction to Proactive Law: A Business Lawyer’s View” and “Business Success and Problem Prevention through Proactive Contracting“.

The third in the series of Proactive Law Conferences, “Commercial Contracting for Strategic Advantage – Potentials and Prospects” was held in Turku, Finland, in June 2007. The conference papers were published in “A Proactive Approach to Contracting and Law” (Ed. Helena Haapio), published by IACCM and Turku University of Applied Sciences in 2008.

After this event, on 16 June 2007, a group of 12 delegates got together to form the ProActive ThinkTank. The mission of the ThinkTank is to provide “a forum for business leaders, lawyers, academics and educators to discuss, develop and promote the proactive management of relationships, contracts and risks, and the prevention of legal uncertainties and disputes”. During the first year, the group grew from a Dozen to more than two Hundred participants. Today, many more have registered – a unique group: cross-industry, global, and representing both private and public organizations, researchers and practitioners and buy-side and sell-side perspectives. ProActive ThinkTank Updates provide a means to collect and share best practice tools and techniques, case studies, articles, and reports on ongoing research.

The 2009 Proactive Law Conference, “Contracting and Law: Proactive and Innovative Approaches”, was held at ICN Business School in Nancy, France. The 2011 Proactive Law Conference “Proactive Law in a Global Business Perspective” was held at Copenhagen Business School in Copenhagen, Denmark. The conference papers were published in “Proactive Law in a Business Environment” (Eds. Gerlinde Berger-Walliser & Kim Østergaard) published by DJOF Publishing, Copenhagen 2012.

Collaboration between participants in the Nordic School of Proactive Law, the ProActive ThinkTank, and legal scholars in the United States has enriched the proactive approach and expanded its reach. These undertakings have explored, among other things, the use of the law for competitive advantage and the interaction between law and strategy. Later Proactive Law Conferences have been organized in conjunction with IACCM events. The 2013 Proactive Law Conference / IACCM Academic Forum “Integrating Law and Contract Management: Proactive, Preventive and Strategic Approaches” was held in Phoenix, AZ, USA, and the 2014 event “Modern Contract Management: Integrating Contract Theory, Law, and Organization Studies” in Copenhagen, Denmark.

After the pandemic, the Proactive Law approach gained increased momentum. Several articles and book chapters building on the approach were published, Proactive Legal Design became a thing, and a book project was initiated by Law and Management, a global research network which brought old and new constituents together again. In 2022, Universities in Finland and abroad set up a Proactive/Preventive Law Initiative (PPLI) and joined in an effort to build an International Network for Proactive Law (INPL). A LinkedIn Group, International Network for Proactive Law, was set up, and events were organized in Helsinki, Tampere, Vaasa, Stockholm, Tallinn and online, on topics related to Proactive Law, Contract Design, Legal Design, and Sustainable and Responsible Contracting (see Events).

In IACCM/WorldCC research into the terms that are most frequently negotiated, for more than 20 years now, limitation of liability has been the most negotiated term (see Most Negotiated Terms 2022) While few would dispute the importance of limiting liability, for many, this would not be the most important term of a contract; terms such as scope and goals, specifications, price, price change and delivery would be among the most important. In its 2023 Report on the Most Important Terms 2022, WorldCC calls to action to shift negotiators’ focus from the most negotiated to the most important terms. But how? “Working with its members” the Report states, “WorldCC has identified four major initiative that contribute to effective change. These are:
1. Contract simplification and design;
2. Proactive Legal thinking,
3. Establishing a balanced position on contract terms and
4. Improved planning.”

The proactive law approach at EU level

The European Economic and Social Committee (EESC) adopted its Opinion The proactive law approach: a further step towards better regulation at EU level (Ref. CESE 1905/2008) at its plenary session on 3 December 2008. The Section for the Single Market, Production and Consumption was responsible for preparing the Committee’s work on the subject. The Rapporteur was Mr. Jorge Pegado Liz, with Helena Haapio acting as Expert. The Opinion (MS doc) was published in the Official Journal of the European Union in the Spring 2009 in all official EU-languages.

Read more about Proactive Law and its roots in Preventive Law

^ Go back to the top