Ethical Perspectives on Personalized Law

This post is part of a special series of posts based on contributions to a conference on ‘The Law between Singularity and Equality’ that took place in Berlin on 31 October/1 November 2025.

The following presents some reflections on how the personalisation of law might be assessed from an ethical perspective. To do so, a few conceptual clarifications are required.

Some Basic Clarifications

Let us begin with the concept of ethics and its relevance in this context. Ethics is understood as the philosophical study of moral phenomena; it concerns what people ought to do or which behaviour is morally right. There is, however, no consensus on the standards by which such evaluation should be carried out. For the sake of simplicity, I will refer to two major mainstream theories that represent the spectrum of different moral approaches:

On the one hand, a deontological analysis following Immanuel Kant. This is exemplified in the categorical imperative, according to which the moral assessment of an action depends on whether the guiding maxims of that action can be universalised as (moral) law. What matters here is solely the internal motivation of the individual—the duty owed to oneself. This approach is therefore referred to as deontological ethics.

On the other hand, I will draw on utilitarianism in the tradition of Jeremy Bentham. According to this view, the value of an action is not judged by the motivation of the agent, but by its consequences. Actions are morally good if they increase the overall benefit (happiness or utility) for people.

Secondly, it is necessary to clarify what is meant by the personalisation of law. By this, I refer to a legal-political demand, notably advanced by Omri Ben-Shahar and Ariel Porat, which has been the subject of extensive research and essentially challenges the axiom that laws must be interpersonally uniform. There are, however, different variants of this idea. While Ben-Shahar advocates for a highly precise personalisation, stoked up by Big Data and implemented by algorithms, aiming to create individualised legal rules for each person based on criteria like income, employment, personality, and past behaviour, others support the concept of ‘granular law’. This approach focuses on the law itself and seeks to divide the broad general categories of legislation into increasingly finer subcategories.

Differentiation According to Functions of Law

The central question of the following examination is: Does personalised law lead to moral behaviour? When posed in such general terms, this question can yield, at best, only a highly abstract answer. For that reason, the analysis will proceed by distinguishing between different functions that law fulfils. The following will examine three such legal functions: the infrastructure function of law, the balancing function of law, and the regulatory function of law. (These functions were first described in Hellgardt, Regulierung und Privatrecht, 2016, p. 50–64.)

The infrastructure function of law becomes apparent wherever the legal system provides legal instruments that enable legal subjects to pursue their goals in ways that would not be possible without a binding legal order. This is particularly the case when the relevant legal structure has effects on third parties. Examples include property rights, which apply erga omnes, the ability to conclude binding contracts, or the institution of marriage. A legal infrastructure expands the scope of action available to legal subjects.

A slightly different focus lies on norms that serve the balancing of conflicting interests. Given our close social interactions, conflicts between legal subjects are inevitable. A central task of law is to resolve these conflicts by bringing the competing interests of the involved parties into equilibrium. Such balancing can occur in a standardised form (for instance, a rigid rule on the age of majority resolves the conflict between a contract-willing child and a business partner solely in favour of the child, who receives full protection under the legal system), but also through a case-by-case assessment that considers all relevant circumstances (as in the case of extraordinary termination due to a party’s breach of contract).

The final legal function I wish to consider here is regulation. As a legal function, regulation can be defined as the use of law as a governmental instrument with the intention of achieving general steering effects in order to pursue public interest goals. (On regulation as a function of law see also Alexander Hellgardt, ‘Regulation by Means of Default Rules’ in Birke Häcker and Johannes Unger (eds.), Default Rules (Oxford 2025), p. 23, 26–29.) Through the regulatory function, the state restricts the personal freedom of legal subjects in order to achieve objectives that serve the public interest. Unlike interest balancing, regulation does not concern competing interests of other legal subjects, but rather (politically determined) public welfare objectives. To reach these goals, the state employs regulatory instruments—that is, the legal provisions through which the regulatory goals are to be realised.

In the following, I will examine the ethical implications of personalising these three central functions of law. 

Personalising Legal Infrastructure

In the area of legal infrastructure, personalisation would consist in significantly expanding the range of legal instruments and adapting them to the individual needs of legal subjects. For example, marriage could be opened to more than two persons, new types of contracts could be created, or novel, personalised credit security rights could be introduced.

From an ethical perspective, there are initially many reasons in favour of personalising legal infrastructure. If law is understood as an instrument through which individuals can realise themselves, then personalised law expands the individual’s capacity for self-determination. This not only facilitates acting in accordance with Kantian moral duty, but also prima facie generates utility-enhancing outcomes. Ethical disadvantages for the acting legal subject are conceivable only if the expanded legal options enable one to evade a (moral) duty that one would otherwise be obliged to fulfil, or if the new option—due to phenomena such as hyperbolic discounting—later leads to outcomes that diminish the decision-maker’s own welfare.

More serious, however, are potential negative third-party effects. For instance, if a spouse could unilaterally decide to marry another person while continuing the existing marriage, this would be ethically problematic. From a duty-based perspective, such an act would devalue or at least relativise the original marital promise; from a utilitarian perspective, it could negatively affect maintenance claims, shared time, and the organisation of family life.

Similarly, the creation of new credit security rights could harm existing creditors or undermine the availability of property as collateral, potentially rendering legal subjects judgment-proof without any actual loss of economic wealth. This would call into question previously made promises and is therefore ethically problematic from a deontological standpoint. Moreover, it enables legal subjects to behave irresponsibly, thereby endangering the welfare of all.

Personalisation of legal infrastructure must therefore always consider the potential conflicts of interest that may arise from its use. This illustrates the close interconnection between the infrastructure and balancing functions of law.

Personalising Balancing Conflicting Interests

Personalising the balancing function of law would mean opening up previously standardised mechanisms of interest reconciliation to the circumstances of the individual case. Instead of fixed legal age thresholds, uniform limits for alcohol consumption while driving, standardised speed limits, standardised default rules, fixed withdrawal periods for online purchases, or predefined sets of pre-contractual information, there would be rules tailored to the individual capacities and protection needs of each legal subject.

The ethical advantages of such personalisation are evident. Abstract-general rules that are not adapted to the specific characteristics of the acting person may either demand something the person cannot fulfil, or grant a freedom that allows them to legally neglect their moral duties. Both outcomes are problematic from a deontological perspective. A consequentialist ethics would also generally support evaluating individuals according to their personal capacities and protection needs, as such an approach promises to maximise the welfare of the person concerned.

However, this perspective is, quite literally, one-sided. It overlooks the fact that rules of interest balancing are necessary precisely when the freedom spheres of different legal subjects intersect. The aim is to resolve coordination problems that are at least bilateral, often multilateral. The legal system cannot resolve such conflicts if the solution is based solely on the needs of one party. Even in cases such as the protection of minors or consumers, where the law assumes an asymmetrical need for protection, the interests of the other party are always taken into account and may prevail in certain circumstances.

Personalisation based solely on the needs and abilities of one party would thus negate the individuality of the other parties involved and often lead to outcomes that increase the welfare of the considered person at the expense of others. Against this backdrop, personalisation of legal interest balancing can only be ethically justified if it is reciprocal. However, this gives rise to numerous follow-up problems with ethical implications of their own.

First, personalisation challenges the legal system’s ability to coordinate social coexistence through standardisation. If every driver on the motorway has a personalised speed limit, traffic safety is not enhanced but rather compromised. The legal system loses its function as a framework for orientation if no one knows whether another person is currently breaking the law or still acting within their individual legal limits.

These problems intensify in direct interactions. For example, all contracting parties must be subject to the same default rules to fill contractual gaps; otherwise, the effect of reducing transaction costs is undermined, as the more sophisticated party will enforce its interests through standard terms. Differentiating consumers based on their sophistication would allow the contracting party to extract the full cooperative surplus through individualised contract terms.

There is also the risk that individuals may feel publicly degraded by the consequences of personalised interest balancing. Someone who, even at the age of 25, is not allowed to purchase alcohol or must obtain parental consent for every contract may quickly become socially isolated. These are effects that are particularly questionable from a consequentialist ethical perspective. Moreover, they may lead to voluntary self-restriction by individuals who fear social stigmatisation, thereby unduly limiting their personal freedom of development.

Thus, while personalisation of legal interest balancing may initially appear to promote freedom and welfare, closer analysis reveals that extensive personalisation—regardless of the data and privacy concerns excluded from this discussion—quickly encounters practical and ethical limits. Personalisation primarily benefits legal subjects hoping for a relaxation of paternalistic protective rules and thereby more favourable conditions in legal transactions.

This reveals that a standardised approach—such as the rigid definition of the term ‘consumer’—always has the effect of cross-subsidisation. Less vulnerable legal subjects must comply with rules that are not necessary for their personal protection, but which establish a unified market demand power, resulting in average conditions and prices for all members of the group. Breaking up such a legally constituted community of fate may feel like the removal of a burdensome special tax for the more sophisticated members. However, it leads to the truly vulnerable members bearing the cost—either literally through higher personalised prices or through the reduction of contractual rights.

Ultimately, this results in a redistribution from the bottom up. The ethical implications of this vary significantly depending on the ethical framework and the specific consequences. If protective rules for consumers or investors are relaxed for individuals who, due to their personal wealth and intellectual abilities, can negotiate their protection individually, the ethical assessment from a utilitarian perspective depends crucially on the economic outcomes. If such personalisation leads to significant growth in consumption and investment among the wealthy, this may, from a societal perspective, outweigh the disadvantages for welfare recipients with limited experience in legal transactions.

However, to avoid lasting disadvantages, redistribution through the tax and social welfare system would be necessary. This would turn former market participants into recipients of charity, which is ethically problematic from a deontological standpoint.

Personalising Regulation

Finally, it remains to be examined what ethical consequences would arise from personalising the regulatory function of law. Such personalisation would manifest in the individualisation of regulatory instruments, while the regulatory goals themselves would remain uniform. This is because regulation is here understood as being limited to the pursuit of public interest goals. These goals are determined collectively through the political process, and personalisation would merely entail that different regulatory addressees are governed by different instruments.

For example, if youth unemployment is to be reduced by encouraging more young people to accept jobs that may not align with their ideal preferences, it might be that person A is most effectively motivated by the threat of a fine, whereas person B, due to a different personality structure, responds better to a positive incentive—such as an additional paid holiday if a job is accepted within a week.

A legislator pursuing a specific regulatory goal generally has access to a toolbox of different regulatory instruments, each with relative advantages and disadvantages. Personalised regulation would mean deploying all or many of these instruments for each regulatory goal—not simultaneously, but in parallel, depending on the personality structure of the individual subject. Moreover, individual regulatory instruments themselves could be personalised, such as fines, prison sentences, or Pigouvian taxes.

From an ethical perspective, personalisation of regulation initially allows those subjects who already behave lawfully—perhaps for intrinsic reasons—to avoid unnecessary legal consequences. This reduces the costs of monitoring and enforcement, as authorities can focus on ‘problem cases’. This increases personal freedom from a deontological standpoint and contributes to overall societal welfare. On the other hand, the personal freedom of those identified as potential lawbreakers is severely restricted. Yet, if the overall compliance rate is increased this might be a welcomed effect from an ethical standpoint.

Conclusion

The ethical consequences of personalising law cannot be determined globally, but only in relation to the specific functions of law. The above analysis has evaluated the personalisation of the infrastructure, balancing, and regulatory functions of law using a rough deontological and consequentialist framework. Even this preliminary assessment shows that equality in law not only has intrinsic value but also leads to a range of ethically desirable outcomes. In contrast, increasing individualisation of law offers few ethical advantages that would justify the significant intrusions into personal data and privacy that it entails—issues that were deliberately excluded from the present analysis.

Readers can find the complete Law between Singularity and Equality series on the OBLB here.

Alexander Hellgardt is the Chair of Private Law, Corporate Law and Jurisprudence at the University of Augsburg and Research Affiliate at the Max Planck Institute for Tax Law and Public Finance.