12 - Specificatio

Summary

Chapter 12 discusses the specificatio (mistaken improver) doctrine. About two-thirds jurisdictions have this doctrine, and the doctrinal structure is highly convergent. Most of these jurisdictions limit the application of the doctrine when the nonconsensual improvement is irreversible, and most assign sole ownership to either original material owners or improvers. Almost all jurisdictions adopt the disparity-of-value test and/or the transformation test, but there are eight ways that bad-faith improvers are treated. The disparity-of-value test, in and of itself, does not tend to assign ownership to higher valuers, however. While no ex ante rule-making can ensure allocative efficiency ex post, requiring both the disparity-of-value test and the transformation test is more likely to increase efficiency. Lawmakers looking for a radical reform proposal may also adopt the internal auction mechanism to resolve the problem in specificatio. Besides, even good-faith improvers should not be compensated, as the non-transformative, low-value-increasing improvements are unlikely to be what material owners want. A clear rule of no compensation also decreases litigation cost.