What Does ‘Ad Hoc’ Mean in Legal Terms?
Legal professionals across the globe encounter the term "ad hoc" in various forms. Even if you’ve never studied Latin, you’ve likely heard or read this Latin phrase before. It means for a special purpose and is a common term used in American law and throughout the world. Examples of "ad hoc" usage in the legal context include ad hoc judge, ad hoc committee, ad hoc court, ad hoc attorney, ad hoc analysis, ad hoc basis, and ad hoc basis for a specific matter. The phrase derives from Latin words "ad" and "hoc," meaning "for this (thing)." It exemplifies special, limited, temporary, and informal purposes.
An ad hoc judge refers to a temporary judge who is appointed for a special occasion or purpose. A committee or judicial court organized for a specific purpose is an example of the ad hoc concept. An "ad hoc" attorney, advisor, or committee may be convened to make decisions in a case, at times because of a potential conflict of interest. In some cases in the U.S. judicial system, courts need an "ad hoc" judge to fill in on a case when scheduling issues prevent the assigned judge from hearing a case.
For example , there may be a need for ad hoc support for various purposes, such as when one or more of the engaged attorneys are conflicted because of the nature of a case or because of their respective ties to the client’s ownership group. He or she may have unique skills, experience, and expertise to meet the specific needs of a case. As the need arose, the need for an "ad hoc" solution was required to fill a void. At the onset of a dispute, legal counsel identifies the parts of the dispute that can result in the most difficult issues for resolution, and those that can, with some time and effort, be handled with less difficulty. They may attempt to resolve the aspects that can produce conflict, early in discovery, when they know less about the facts of the case, and when, they hope, strong advocacy will produce better results. Or, they can bring in an "ad hoc" attorney to confer and seek resolution. A key component in these options is the willingness to compromise. Without the willingness to compromise, or resolution of some key components of the dispute, litigation and trial might be required.
The History of ‘Ad Hoc’
The term ‘ad hoc’ has its roots in the Latin language, with its origins tracing back to the 15th century. In Latin, it means literally ‘to this’ or ‘to this place’, in contrast with ‘ad longum’, which means ‘to that place’ – territorial markers now associated with the horizon. In time this would transform to ‘ad hoc’, meaning specific to its purpose. As with many other phrases it was the Bible which popularised it in English, specifically the Vulgate Bible which was published in 1582. The phrase ‘ad hoc’ appeared in the Book of Job (Job 31:4) and meant to refer to, or adapt to a situation. Although the exact wording varied, it remained. Literally translated as ‘footnote’, ad hoc essentially defined a broad body of text to follow. In practice, ‘Ad hoc’ also meant to serve a specific function or purpose, which was used in the 14th century to mean ‘for this’. Overall, this usage and its meaning is closest to the contemporary meaning we have today. Ad hoc, as a legal term, is often used in a somewhat derogatory manner to refer to someone who adopts a ‘shoot from the hip’ approach to problem solving. Sometimes, such an approach can be equally useful, but history suggests that it has its origins in a reaction against the rigidity of government procedures. This ‘fixed’ approach, dating as far back as the 18th century, became a useful tool of government. With the expansion of any government branch comes a corresponding need for process, oversight and bureaucracy. It was the agencies to the US government that first coined the term ‘ad hoc’ to mean some office or manner of operation, which was independent from the standard, codified and procedural norms of the time. Historically, this continued in the 19th century, as this system grew and became stronger. Despite the undoubted benefits of this system, it also gave rise to a number of unintentional drawbacks, with the ad hoc nature of fixing or solving problems becoming a useful counterbalance to this rigging. In 1941, American physicists, chemists and scientists had become so concerned with the growing use of fixed bureaucratic processes, they began to try and introduce alternative methods of problem solving. This movement grew in time, eventually emerging as "Operation Adhoc", which eventually gave its name to the phrase we use today.
‘Ad Hoc’ Committees in Legislation and Governance
Ad hoc committees exist in both the judicial and legislative branches of government, as well as in the private sector. In the context of a court of law, an ad hoc committee typically comprises experienced lawyers selected to help advise the bench on a particular issue. For example, federal judges in the United States, may appoint an ad hoc committee to address the issue of how certain pretrial procedures should be conducted. The appointment of an ad hoc committee can help expedite a court’s ability to obtain information and resolve a dispute, especially when the complex nature of the case requires the court to have a certain level of expertise in the area of law at issue.
Ad hoc committees also can be formed in legislative bodies. For example, the legislative committee might name an ad hoc committee and appoint committee members to address an issue that requires prompt attention. Findings or recommendations by the ad hoc committee will then be reported to the full legislative committee, which may choose to consider the findings in their decision-making. For instance, a legislative committee might name an ad hoc committee to study a particular regulatory scheme. Once FCUDE concludes its report, the ad hoc committee may make recommendations for changes or improvements to the regulatory scheme based on its analysis.
The formation of ad hoc committees within certain legal systems has been challenged as possibly being unconstitutional. In 2000, the U.S. Court of Appeals for the Second Circuit described a Federal Election Commission (FEC) administrative complaint as an "ad hoc committee," which was not a court of law. The FEC thus did not have the authority to issue an injunction against an individual, because the FEC "is not a court" and "has no authority to issue injunctions[.]" (FEC v. Falwell, 2000 WL 1146304 (2d. Cir. 2000)).
The Role of ‘Ad Hoc’ in Arbitration
Where arbitration is not being undertaken under the auspices of an institution, the term ad hoc will generally be used, meaning for that case alone. This is typically contrasted with institutional arbitration, for example as provided by the LCIA, ICC or elsewhere.
It is common practice in international arbitration for parties to agree, at a preliminary stage in the process, their preference for ad hoc or institutional arbitration. Institutional arbitration has its advantages and disadvantages, but it is fair to say that, in general, the fees of the institution will be higher, albeit that it or its administration may contribute to the speed of the process. An advantage of ad hoc arbitration is that the parties retain control over the process and won’t be bound by the internal rules of an institution; a disadvantage, however, is that the administration will likely take longer and be of a more ad hoc nature, and the costs are less immediately predictable.
Ad hoc arbitration can be appropriate, for example, where an institution’s administration might be skewed to the needs of the business in which the parties are engaged. Ad hoc arbitration can also be useful where the parties want to settle disagreements without going through the motoring higher cost of institutional arbitration. The ad hoc route will also appeal to parties who want to maintain a relationship post a dispute, and are therefore not keen on an institutional arbitration mechanism.
What is very important, particularly from a client’s perspective, is the extent to which the parties are willing to cede control over the process. The administrative functions may be dealt with by a firm of lawyers, and it will have experience of undertaking arbitrations ie the parties would not be left floundering and wondering what to do next. Equally, the administrative arm may be a third party and be paying fees to the third party.
An example for this ad hoc approach in practice might be where two businesses are operating in a collaborative way, looking at bringing products to the market. In order to agree terms, they enter into an ad hoc arrangement to carry out due diligence on IP rights associated with that product. They may also go on to agree the terms of supply, and have the exchanges of these documents noted as part of an attachment to the final contract between them.
Ultimately, however, ad hoc arbitration is a process whereby the parties are responsible for running the process, and must therefore ensure that there are periods scheduled in for action to be taken.
‘Ad Hoc’ in Legal Precedents
In various legal contexts, the principle of ad hoc has been considered by courts across the United States. One such case dates back to 1933, where the Board of Governors of the Federal Reserve System v. Great Western United Corp., the Board of Governors of the Federal Reserve System was petitioned to order dissolution of the First National Bank of San Fernando and also to order that Great Western United Corp., among others (not just the requestor), be enjoined from using or employing "in any manner whatsoever" the word "bank," or its equivalent, in any corporate name, sign, advertisement, advertisement or letterhead in such corporation which it maintains, appoints, controls or carries on within the State of California.
Similarly, in Moreland v. Veno, 2007 WL 3256782 (N.J.Super.A.D. Nov 1, 2007), the Appellate Division of New Jersey Superior Court claimed that an arbitration agreement was enforceable against a minor plaintiff "as an exercise of the ad hoc doctrine because the motion judge found that it was fair under the circumstances and the plaintiff had received a benefit from the transaction." Finally, the court ordered that there should be a modification order to the settlement to reflect increase payments to the plaintiff as compensation for college expenses.
An even more interesting ad hoc finding occurs in Van Buren v. Ford Motor Co., 10-1042 (3d Cir. 2011) (holding that the district court’s decision to modify the class certification opinion, to bifurcate with a mini-trial on liability, and to require additional discovery was proper under the circumstances presented). The Third Circuit Court of Appeals Court of Appeals’ ruling was given en banc , meaning that all judges heard the case. It is no wonder why the ruling focused on the "judge’s discretion and the standard of appellate review," as the result of the ruling would have affected 600,000 plus people as members of the class action.
One final New Jersey Superior Court case, Benenati v. Dean Witter Reynolds Inc., the court was called upon "to resolve seven appeals which stem from a national class action alleging the defendant breached a fiduciary duty to shareholders in violation of federal law and which was brought under the Private Securities Litigation Reform Act of 1995 (‘PSLRA’)." The court noted at the outset: "We are faced with a novel issue suggested only in passing by the United States Supreme Court, namely, whether a common fund settlement of a nationwide class action, purportedly approved pursuant to state law procedures, is void and unenforceable in a federal securities fraud class action under the PSLRA." Thus, the court was called upon to handle an issue with no clear precedent. The Benenati court accordingly made use of the ad hoc rule when it considered the following: the fairness of the scope of the release, and the adequacy of representation must be considered not only with respect to the actual parties to the class, but by also considering the likely circumstances of the many putative members of the class.
Overall, the ad hoc rule allows courts to exercise their discretion when making rulings in cases where it is fair and equitable to do so, and where there is no clearly applicable precedent.
The Use of ‘Ad Hoc’ in International Law
The ad hoc is a regular fixture in the field of international law. Either as a general term for an agreement, mechanism or arrangement specific to the context at hand, or in the context of the subject matter of international treaty, the ad hoc is a number of widely-utilised tools at the disposal of state actors and other signatories to international agreements.
As an example, the ad hoc balance of payments agreement is one such adaptation to the framework of international economic law. Referring to a mechanism whereby states ‘sought to alleviate balance of payments difficulties’, the ad hoc balance of payments agreement was seen as a ‘temporary agreement under which a few major countries provided financial support to a few less major ones with balance of payments (BOP) problems’. As was reported by the International Monetary Fund (IMF) in 1990, an ad hoc agreement of this nature was ‘a temporary measure to meet a balance of payments need as a result of the unsatisfactory market access and need for liquidity’.
Under that rubric, multilateral development banks were often used to administer this type of ad hoc arrangement as a means of enabling the coordinated implementation of such arrangements for the benefit of the wider international community. Under the rubric of that structure, the Bank of International Corporations (presumably with such members as the World Bank or the African Development Bank) was used to administer any number of agreements, including for the purposes of reaching the goals of The United Nations Conference on Trade and Development (UNCTAD) or even the United Nations Environmental Programme (UNEP).
Limitations and Criticism of ‘Ad Hoc’ Legal Structures
Critics of ad hoc mechanisms in law point to the potential for ambiguity and lack of uniformity. For example, if a court decides a case using an ad hoc standard, how binding is its decision? Does that mean that other courts should reach the same decision, and can they be held to that decision? If not, there is the possibility of inconsistent rulings setting precedents applicable only to certain situations. As such, some legal experts prefer a more structured system with factors equally or greater in number to the factors used in an ad hoc evaluation. In fact, this is often the reasoning behind codifying ad hoc standards in statutes, as it allows for a more predictable system. This preference is particularly obvious in the corporate world, where a standard must exist to help a company fairly and consistently evaluate if a conflict of interest exists.
However, in some cases, ad hoc standards for evaluating conflicts of interest or other issues where a clear and concrete standard is unlikely to work are useful. In particular, the ad hoc standards are found to provide needed flexibility to apply to a wide diversity of situations. In many situations, there is no clear line over which a situation has become a conflict of interest. For example, if a lawyer discloses information to a spouse or child out of instinct, that action may not justify a conclusion that a conflict of interest has arisen when the lawyer is acting in their professional capacity, especially when the child or spouse is not a client. Likewise, sometimes very minute facts can create huge legal issues. For example, if a fraudster engages in fraudulent activity, and you unknowingly buy into the fraud, with the intent of reselling the product, you can’t be sued for theft or receipt of stolen property due to intent. If it might be unclear whether intent exists, an ad hoc standard that considers the facts of the situation specifically in light of a totality of factors is preferred for determining the nature of the situation.
And this preference stands, despite the fact that broad ad hoc standards can be manipulated to cover any situation, and are difficult to hold accountable to when they fall short of practicality or a reasonable expectation of fairness. Particularly in a corporate context, it might be more useful to create a structure purporting to hold a large corporation to account, rather than a very small one.
The Future of ‘Ad Hoc’ Legal Mechanisms
Ad hoc arrangements are likely to continue playing a significant role in legal systems, particularly in light of the rapid pace of technological change and the need for flexible, responsive legal frameworks. As new industries and business models emerge, legal systems have been challenged to keep up, often leading to the creation of ad hoc regulations that address specific needs without imposing unnecessary burdens.
For example, as artificial intelligence and blockchain technology continue to evolve, regulators may increasingly turn to ad hoc solutions to address issues such as liability in self-driving cars or the legal status of smart contracts. This type of creative problem-solving has allowed regulators to strike a balance between fostering innovation and protecting public interest.
Moreover, the future of ad hoc arrangements will also be influenced by the growing demand for alternative dispute resolution methods, such as mediation and arbitration. These methods often rely on ad hoc processes that prioritize the parties’ needs and preferences, offering an efficient and effective alternative to traditional court-based approaches .
As the future unfolds, it will be important for legal systems to embrace a proactive approach to ad hoc arrangements. This means acknowledging the necessity of theseFlexibility, responsiveness, and adaptability have become cornerstones of effective governance. Moving forward, regulators must find ways to integrate ad hoc arrangements into broader regulatory frameworks, ensuring that both current and future needs can be met.
In this context, transparency and stakeholder engagement will be vital. By involving industry players, legal practitioners, and the public in the development of ad hoc arrangements, regulators can create inclusive solutions that reflect the needs and concerns of all stakeholders. This will help build trust in these new approaches to legal problem-solving, laying the groundwork for their long-term success.
In conclusion, the future of ad hoc arrangements within legal systems looks promising, but challenges will no doubt arise. Both lawmakers and practitioners will need to remain vigilant and proactive in order to harness the potential of these ad hoc solutions to better serve the complex and ever-changing needs of society.