The economics of Islamic law in Britain

This RNS article (via Pew, also reported elsewhere, e.g., this Times Online article) reports a new development in British courts regarding Islamic law. Sharia (see wikipedia) is the body of Islamic law. In western nations, this law has no official legal status. However, Muslims may still prefer to have Sharia councils rule in legal disputes, especially those concerning family or property, because they want those disputes to be resolved according to Islamic legal principles. The British government has just determined that parties in a Sharia court can apply for (British) legal approval of Sharia rulings. A British official would only have to ascertain that the Sharia ruling complied with British legal principles.

At one level, the economics of this development is straightforward. Parties often use an independent arbitrator (see wikipedia) to resolve contract disputes because doing so usually involves much fewer resources spent on lawyers and the development of legal documents and arguments. It also relieves pressure on the government's legal system because arbitration results can be legally binding while keeping the parties out of court. Thus, all parties benefit. Muslims who use Sharia councils to resolve their disputes are essentially using Islamic law to guide a private arbitration. They benefit because they get to have Islamic principles resolve their disputes and because the costs are lower than public courts, while the public benefits because the strain on the public courts is relieved. The recent British ruling actually established Sharia councils as private arbitrators.

But there are the subtler economic issues here, too. This development has its critics, and one of the biggest worries is that the Sharia courts will not comply with British legal principles, especially with regard to the treatment of women. Another concern is that Muslims will be further marginalized in British society because they are withdrawing to a privatized legal sector instead of using the public court system. Either way, this development would lead to increased stigmas as Muslims draw themselves apart from the rest of British society. This constitutes an increase in costly tension between Muslims and society.

We discussed how this sort of tension can actually help the group, but it is possible that this is not the case here. One of the Muslims' arguments is that other religious courts (e.g., Jewish) already had arbitration status, and so the development is really a way for Muslims and their practices to find improved acceptance in society. Put differently, this development should actually decrease tension as society becomes more accepting of Muslims' practices. If so, this decrease in tension, combined with the benefits of religiously-based arbitration, is a win-win situation. The key issue is whether or not the Sharia courts comply with the British principles of fairness and equity. This is what must play out in the future.