4

Allocating property rights

4.1. Introduction

In Chapter 3 we dealt with the question of whether it is justifiable to have exclusionary property rights at all. If we accept that the answer is yes, it then becomes necessary to consider who should have such rights, which amounts to Lawrence Becker’s question of specific justification outlined in section 3.2 above: ‘What sorts of people should own what sorts of things and under what sorts of conditions?’ This is the subject of this chapter.

Just as when considering the general justification for property rights, it is helpful to start with original acquisition. Most legal systems adopt the first occupancy or first taker rule, i.e. that the law will protect the first taker of a thing. In the case of tangible things, this usually means taking physical control of the thing (technically, possession). Intangible things can also be allocated by a first taking rule, however. For example, an inventor of a process gets exclusive rights to exploit it for a limited period by being the first person to patent it. The patent system is essentially a notice filing system, and such systems can also be used to allocate property to the first taker of tangible assets, where the taking of physical control is not feasible, or disproportionately expensive or exclusionary. Mining rights in the developing American West, for example, were sometimes allocated to the first person to file a claim rather than to the first person to enclose the land containing the mine.

We consider the justifications for this first occupancy rule as it operates in the context of original acquisition of things in section 2. However, it is important to appreciate that the spread of the rule goes beyond original acquisition. One of the justifications of the first occupancy rule is that it is simply an aspect of the way in which the law protects holdings generally against strangers, even when unlawfully acquired. In other words, our legal system, in common with others, confers property rights on those who take control of things not only when the thing was previously unowned, but also when there is a pre-existing owner. In the latter case the protection the law gives is more precarious: the taker acquires rights enforceable against everyone except the pre-existing owner (or another person who has a prior claim to possession, such as a tenant), whereas in the former case (where the thing was previously unowned) the rights acquired by first taking are enforceable

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