2 How are law and ethics related?

Legal and ethical duties are very different. They often overlap, but may also diverge.

Legal duties are those standards created by society for which non-compliance may result in a lawsuit or criminal charges. They stem from statutes passed by state or national legislatures, regulations passed by administrative agencies, and common-law duties created by courts over time. Legal duties come with external, compulsory enforcement mechanisms. For example, if a company fails to comply with laws for paying employees overtime, those employees may join together and sue the company for violation of the law. Or, if an individual working for a company trades on the company’s stock in a way that violates federal securities law, that individual may likely go to jail for their actions.

In contrast, ethical duties do not come with external, compulsory enforcement mechanisms. That is, there are no “ethics police” that may imprison or fine company officials if they fail to behave ethically. The boundaries of what is ethical or not may be more unclear than what is legally required or not, and consequences for unethical behavior play out in the courts of public perception rather than courts of law.

In many cases, legal and ethical duties may overlap. For instance, not committing fraud would be considered an ethical duty and a legal duty. That is, committing fraud is the kind of conduct that can easily result in lawsuits or criminal charges, and committing fraud would also violate generally accepted principles of ethics.

In other cases, legal and ethical duties may diverge. For instance, failing to comply with a speed limit violates a legal duty, but if one does so in order to respond to an emergency with lives at stake, ethics may suggest exceeding the limit.  The following two Questions will consider the overlap and divergence between law and ethics in more detail.