Dworkin’s Normative Legal Theory

Dworkin applies a rights perspective to law by assuming that “citizens have moral rights and duties with respect to one another, and political rights against the state as a whole.”Footnote ⁴⁶ He asserts that “moral and political rights should be recognized in positive law” and “enforced upon the demand of individual citizens through courts or other judicial institutions.”Footnote ⁴⁷ In contrast to the positivist view of the rule of recognition, Dworkin suggests a “coherence theory of legal truth” that argues that a correct decision in a case should depend not only on how well it fits into the comprehensive and consistent interpretations of the legal system but also on the justification by principles of morality.Footnote ⁴⁸ He develops a framework of normative legal theory by classifying legal standards into rules, principles and policies.Footnote ⁴⁹ Rule is defined similarly to the positivist perspective as “a command as an expression of desire that others behave in a particular way, backed by the power and will to enforce that expression in the event of disobedience.”Footnote ⁵⁰ Rules stipulate specific things that relate to validity and exist in an all-or-nothing fashion.Footnote ⁵¹ Thus, rules have binary outcomes such as prohibited and allowed or obligatory and nonobligatory.Footnote ⁵²

Principle is defined as “a standard that is observed, not because it will advance or secure an economic, political, or social situation deemed desirable, but because it is a requirement of justice or fairness of some other dimension of morality.”Footnote ⁵³ Principles are considered general and fundamental maxims of law and represent the substantive values and purposes of a community.Footnote ⁵⁴ Two properties of principles can be identified. First, they comprise normative moral statements related to social goals such as justice and morality. The values can relate to individual issues such as justice and benevolence or can be collective such as achieving goals related to the environment and equality.Footnote ⁵⁵ Contrary to rules, a feature of principles is that they carry different weights or importance and can be applied in varying degrees. A value principle expresses an ideal that cannot be achieved totally but in degrees.Footnote ⁵⁶ Second, the principles can be used by judges to make decisions,Footnote ⁵⁷ and actions are judged according to the degrees to which they align with the principles that guide judges to arrive at legal decisions.Footnote ⁵⁸ Principles of justice, however, are not legally binding but instead are applied on moral grounds. In this sense, the principles are applied voluntarily from their power of reason in the framework of the social contract.Footnote ⁵⁹

Policy is defined as a “standard that sets out a goal to be reached, generally an improvement in some economic, political, or social feature of the community.”Footnote ⁶⁰ As a social goal, policies identify benefits and burdens and their trade-offs for the community and can be introduced when creating legislation. For example, economic efficiency and equality can be policy goals because they lead to the largest aggregate economic benefit that need to be distributed according to some criteria.Footnote ⁶¹ Because policy “advances or protects some collective goal of the community as a whole” and principles “secure some individual or group right,” they can be thought to relate to political decisions.Footnote ⁶²

Dworkin’s legal theory can be used in framing legal rights and duties in rules and also in disputes. An option would be to embed the policies and principles in forming the normative character of law in the rules of law.Footnote ⁶³ Policies affecting fairness can be introduced through legislation and regulations because policies setting out social goals lie in the realm of political decisions. In this framework, principles provide the normative propositions that establish the purposes of law and rules are used to achieve these goals by stating actions and consequences.Footnote ⁶⁴

The focus of Dworkin’s normative theory relates to the adjudication of hard cases in which existing rules do not provide a clear basis for making judgments. A key issue in normative theory concerns the intention or purpose of a particular statute or legal clause in terms of the rights that it provides with respect to the social goals identified in the policies. This becomes relevant in cases where the rules do not cover specifics, which makes it difficult to make judgments. While one way to decide these cases is to use values inherent in the legislative purpose, it may be difficult to ascertain legislative intent.Footnote ⁶⁵ In cases where rules are not specific and judges are not able to ascertain legislative intent, Dworkin’s normative theory suggests using policy objectives and principles entailing moral underpinnings to make judgments.Footnote ⁶⁶ However, because policies may be expressed in general terms, they allow for a variety of interpretations and evaluations by judges.Footnote ⁶⁷

Recognizing that judging cases based on policies that represent social goals may give judges broad discretion in interpretation, judges should make decisions based on principles rather than policies.Footnote ⁶⁸ The discretion of judges is minimized by using principles as they constitute an “interpretive source to fill gaps in the law and a general source of values.”Footnote ⁶⁹ However, it is also possible that various principles provide different and contradictory directions. In adjudicating cases, judges are likely to use relevant principles that reflect fairness and the institutional history of the legal system and prefer judgments that are supported by more important principles.Footnote ⁷⁰

Juridical Theory of Law (Uṣūl al-fiqh)

The dominant Islamic legal theory (uṣūl al-fiqh) started with the writings of the ninth-century scholar Abu Abdullah Muhammad ibn Idris Al-Shafi’i (767–820 CE) and evolved over time.Footnote ⁸⁴ The term uṣūl (sing. aṣl) means origins but also signifies principles or rules. Footnote ⁸⁵ Al-Shafi’i laid down the rules of applying reason in developing laws which later evolved into the methodological discipline of Islamic legal theory of uṣūl al-fiqh. Footnote ⁸⁶ Uṣūl al-fiqh is translated variously as sources of law,Footnote ⁸⁷ principles of jurisprudence,Footnote ⁸⁸ sources and methods,Footnote ⁸⁹ and juridical theory. Footnote ⁹⁰ Uṣūl al-fiqh (termed briefly as uṣūl) is the formal science of dealing with legal theories, the principles of interpretations of the legal texts, methods of reasoning and deduction of rules.Footnote ⁹¹ Other than depending on the laws and rules in the primary sources of sharīʿa (Qurʿān and Sunnah), uṣūl identifies other methods of deriving legal rulings.Footnote ⁹² Most Islamic positive law is derived by using different methods of uṣūl al-fiqh. Footnote ⁹³

Two widely accepted sources of deriving law used under uṣūl are consensus (ijmāʿ) and analogy (qiyās). Ijmāʿ is the unanimous agreement of the scholars of the Muslim community on a particular matter and is considered the third source of Islamic law after the Qurʿān and Sunnah.Footnote ⁹⁴ Another agreed-upon method to deduce laws is qiyās (analogy), whereby a concept is identified in the original case (aṣl) in the sharīʿa revealed texts and extended to a new case if the latter has the same effective cause (ʿilla)Footnote ⁹⁵ as the original. Specifically, if the new case has a shared or similar effective cause as the original case in the sharīʿa revealed texts, then the ruling from the original case is applied to the new case.Footnote ⁹⁶ While qiyās provides legal legitimacy by linking new rules to the revealed texts, the role of human rationality and reason in deriving new rulings depends on the clarity of effective cause (ʿilla) in the sharīʿa revealed texts. In cases where the effective cause is obscure or not apparent, jurists use intellect and rationality to arrive at rulings, which can result in probabilistic and diverse interpretations.Footnote ⁹⁷

Beyond the agreed-upon methods of consensus (ijmāʿ) and analogy (qiyās), some other methods are also suggested by different jurisprudential schools, particularly for cases that do not have a clear effective cause (ʿilla) in the sharīʿa revealed texts.Footnote ⁹⁸ Juristic preference (istiḥsān) is “a legal principle which authorises departure from an established precedent in favour of a different ruling for a reason stronger than the one which is obtained in that precedent.”Footnote ⁹⁹ Istiḥsān involves using discretion to avoid rigidity and unfairness that might result from a literal understanding and interpretation of the law. In using istiḥsān, a former fiqh ruling arrived at by analogy (qiyās) can be set aside by using a better proof from the Qurʿān and Sunnah to arrive at a fairer ruling. Another important method is unrestricted interest (maṣlaḥa mursala), which is used in cases that do not have direct references in the sharīʿa revealed texts making the use of qiyās difficult.Footnote ¹⁰⁰ In these cases, rulings are made to enhance the benefits or welfare (maṣlaḥa) of people and to prevent harm (mafṣada). Both juristic preference (istiḥsān) and unrestricted interest (maṣlaḥa mursala) would use normative judgments to derive rules.Footnote ¹⁰¹

In some cases, ḥiyal (sing. ḥila) is also used to derive new rules. Ḥila has been used historically as legal stratagems or devices to achieve certain outcomes that may be lawful or unlawful.Footnote ¹⁰² One way in which ḥila is used is to focus on the form rather than the substance of the law. During contemporary times some scholars use eclectic ijtihād to derive rules by using methods that are not recognized in the original list of methods of uṣul al-fiqh. Footnote ¹⁰³ The method of selection (takhayyur) adopts suitable injunctions of past scholars from different schools to derive rulings and patching (talfīq) is used to derive rulings by combining opinions from different sources of jurisprudential schools.Footnote ¹⁰⁴ These methods do not refer to sharīʿa revealed texts directly and sometimes use minority views of past scholars to derive rulings.

Purposive Based Theory (Maqāṣid al-Sharīʿa)

The purposive theory based on the notions of maṣlaḥa and maqāṣid al-sharīʿa presents a normative foundation of Islamic law by positing that the primary goal of the Lawgiver is the good of people.Footnote ¹⁰⁵ Maṣlaḥa, translated variously as public interest, well-being, and welfare,Footnote ¹⁰⁶ is classified into three categories: necessities (ḍarūriyyāt), complementary requirements (ḥājiyyāt), the luxuries (taḥsīniyyāt).Footnote ¹⁰⁷ The ḍarūriyyāt (sing. ḍarūra) are essentials that form the basic elements of a good life, and their absence or defect can lead to the breakdown of the social order of a community.Footnote ¹⁰⁸ The complementary requirements (ḥājiyyāt, sing. ḥāja) alleviate hardship, help to attain comfort, and are needed for the proper functioning of the community and the achievement of its interests. The absence of ḥājiyyāt impedes the functioning of social order but does not lead to its collapse. Taḥsīniyyāt are luxuries and beautifiers that contribute to a peaceful life and promote the splendor and perfection in the social order and condition of a community.

The goals of sharīʿa (maqāṣid al-sharīʿa) include the protection of essentials (ḍarūriyyāt) and entail the basic elements of a good life, which are identified as safeguarding the faith, self, intellect, posterity, and wealth.Footnote ¹⁰⁹ Furthermore, justice is ordained by religious texts (Qurʿān and the Sunnah) as an overriding objective of Islam, and it should permeate all aspects of social and economic relations.Footnote ¹¹⁰ Contemporary scholars have expanded the scope of maqāṣid to include several other societal issues. For example, al-Qaradawi includes concepts of fraternity and human rights along with freedom and equity as elements of maqāṣid,Footnote ¹¹¹ and Auda considers maqāṣid as divine intents and moral concepts that are linked to contemporary notions of human rights, development, and civility.Footnote ¹¹² Similarly, Attia identifies several additional purposes of sharīʿa, which he organizes under individual, family, the umma and humanity.Footnote ¹¹³ Ibn Ashur asserts that maqāṣid should include equality and freedom and adds other objectives of sharīʿa such as building a strong community and stable social system. He also recognizes specific maqāṣid for different types of human activities and dealings. For example, he identifies the maqāṣid for economic transactions as marketability, transparency, preservation, durability, and equity or justice.Footnote ¹¹⁴

While the purposes and objectives (maqāṣid) of sharīʿa have been discussed by scholars since the twelfth century,Footnote ¹¹⁵ Abu Isḥaq Ibrahim ibn Musa al-Shatibi (1320–1388 CE) presented the maqāṣid al-sharīʿa based methodology in detail. The maqāṣid al-sharīʿa (briefly referred to as maqāṣid) approach focuses on the normative goals of sharīʿa revealed texts and is based on the premise that the Qurʿān provides general principles representing the intention of the Lawgiver (God) which form the purposes and objectives of the sharīʿa.Footnote ¹¹⁶ Maqāṣid constitutes the higher goals of sharīʿa that are permanent and universal signifying the wisdom (ḥikma) of legislationFootnote ¹¹⁷ and representing “divine intents and moral concepts upon which the Islamic law is based.”Footnote ¹¹⁸

Unlike the key method of qiyās in uṣūl al-fiqh that is centered on technical and formal issues of linking rules to the texts, the maqāṣid approach is concerned with values and deriving rulings related to issues faced in reality.Footnote ¹¹⁹ Emphasizing that the values and objectives of the sharīʿa cannot be understood by examining linguistic forms only, al-Shatibi’s purposive legal methodology suggests incorporating maqāṣid as an essential part of law-making.Footnote ¹²⁰ Beyond examining the texts and the methods of deduction, this would require an adequate understanding of the objectives of the sharīʿa.Footnote ¹²¹ Al-Shatibi suggests using the method of inductive reasoning (istiqrā’) to arrive at maqāṣid that are used to derive sharīʿa rulings.Footnote ¹²²

Instead of examining specific rulings, a general and overall reading of various sharīʿa revealed texts leads to the derivation of maqāṣid. For example, even though the Qurʿān does not have a specific verse stating the goal of the sharīʿa is the welfare of mankind, it can be concluded from its general reading.Footnote ¹²³ Based on the readings of texts, scholars have concluded that the underlying principle guiding sharīʿa rulings is related to the end result of increasing welfare and minimizing harm.Footnote ¹²⁴ Thus, sharīʿa ordains doing certain acts as they “secure the welfare of the community and forbid evil” because it is against the public welfare.Footnote ¹²⁵ Because maqāṣid relate to the consequences of acts, their neglect can lead to rules deviating from the Lawgiver’s intent of enjoining good. Viewed as purposes and goals, maqāṣid can be considered as providing teleological ethical perspectives of sharīʿa. Specific methods of unrestricted interests (maṣlaḥa mursala) and juristic preference (istiḥsān) discussed above use the methodology of purposivism to derive rules that can achieve the maqāṣid.

Legal Maxims (Qawāʿid al-fiqh)

An important genre of Islamic legal theory literature is the legal maxims (qawāʿid al-fiqh) that reflect the spirit of Islamic law.Footnote ¹²⁶ While the existence of qawāʿid (sing. qaida), which technically means principles, can be traced back to the seventh century CE, they became more prominent in the legal writings of the fourteenth century.Footnote ¹²⁷ Based on recognized references in the religious texts and jurisprudence, the maxims evolved over time to become general principles manifesting the essence of sharīʿa.Footnote ¹²⁸ Qawāʿid al-fiqh is defined as “universal legal principles which are formulated in regulative and concise expressions that contain general normative legal determinations about the cases of their subject.”Footnote ¹²⁹ Legal maxims form a key tool in law-making as they represent “settled principles of law to which jurists appeal to when confronting new legal cases”Footnote ¹³⁰ and embody universal rules that can be applied to particular cases.Footnote ¹³¹

Legal maxims can be categorized in different ways. One way to distinguish maxims is between those derived from religious texts (Qurʿān and Sunnah) and the ones that are extracted from fiqh by jurists.Footnote ¹³² Those derived from religious texts carry more weight and influences the decisions of jurists and judges, and those extracted from fiqh by jurists provide persuasive influence in forming rules and judicial decisions. Although there is general agreement among different schools on most qawāʿid derived from religious texts, some maxims can differ across jurisprudential schools.Footnote ¹³³ Maxims can also be viewed as those having legal connotations and others as having ethical overtones. For example, the maxims “if permissibility and prohibition coincide, prohibition prevails” and “what is prohibited to take is also prohibited to give”Footnote ¹³⁴ fall in the legal category. Maxims with ethical undertones include “the fundamental requirement in every contact is justice.”Footnote ¹³⁵ Maxims are also categorized as major maxims and sub-maxims derived from these.Footnote ¹³⁶

Another way in which the qawāʿid are categorized is interpretive maxims (qawāʿid al-uṣūliyya) and substantive maxims (qawāʿid al-fiqhiyya).Footnote ¹³⁷ While interpretive maxims relate to “textual principles of interpretation drawn from the field of jurisprudence,” substantive maxims are linked to “principles more closely related to the structure or substance of positive law.”Footnote ¹³⁸ Although qawāʿid al-uṣūliyya concerns hermeneutic principles relating to language-oriented rules which are used to understand the implications of the sharīʿa revealed texts that are used in deducing laws, some maxims under it are common with qawāʿid al-fiqhiyya entailing principles that guide some methods of ijtihād. Footnote ¹³⁹

Other than providing ethical principles, some maxims provide specific standards related to lawmaking. For example, the maxim “custom is considered unless it conflicts with the text” provides a framework for the use of custom (ʿurf) as a source of law-making.Footnote ¹⁴⁰ Similarly, some other maxims are used to develop a legal method of concession (rukhṣa) that is used to create rules in exceptional cases. The maxims “hardship begets facility” and “necessities render the prohibited permissible”Footnote ¹⁴¹ are used to derive rulings that suspend the accepted rules of sharīʿa in cases of hardships or necessities (ḍarūriyyāt). While concession (rukhṣa) can be used to abandon or dilute the force of established law, another maxim, “when the impediment is removed, the original sharīʿa ruling is restored to full effect,”Footnote ¹⁴² limits the leniency and universal use of the method. The rules derived for exceptional cases by using concession become void once the necessity or difficulty ceases to exist.Footnote ¹⁴³ Rules derived using concession (rukhṣa) indicate cases in which normative legitimacy prevails over legal legitimacy.

Critical Appraisal of Islamic Legal Methods

The Islamic legal theories presented above are discussed in a dispersed manner by either presenting each approach independently or in pairs such as discussing uṣūl and qawāʿid or qawāʿid and maqāṣid. Some scholars view qawāʿid al-fiqh to be on an equal footing as uṣūl al-fiqh and identify one of its functions as being to “structure and systemize the law.”Footnote ¹⁴⁴ While the relationship between qawāʿid and uṣūl al-fiqh is recognized, the notions of maqāṣid and qawāʿid are also linked to each other through their close connection to the rules and values of sharīʿa revealed texts. Whereas maqāṣid are derived by understanding the underlying intentions of the Lawgiver in the rulings in the sharīʿa revealed texts, the qawāʿid are “abstracted from the corpus of legal rulings summarizing the legal principles.”Footnote ¹⁴⁵ The close affinity between qawāʿid and maqāṣid is reflected in several maxims providing principles related to maqāṣid that support the overall purposes of sharīʿa of promoting welfare (maṣlaḥa) and preventing harm.Footnote ¹⁴⁶ Examples of such maxims include “harm is to be eliminated” and “averting harm takes precedence over achieving benefit.”Footnote ¹⁴⁷

Some limitations of the individual Islamic methodologies discussed above can be identified. The use of the traditional text-based legal theory of uṣūl al-fiqh to produce formal fiqh is criticized for being without spirit and devoid of reality.Footnote ¹⁴⁸ Jurists of the post-classical period added technicalities in identifying the effective cause (ʿilla) that detached the rulings from maṣlaḥa. Footnote ¹⁴⁹ In cases where the link with the ʿilla in the texts is weak or ambiguous, the rulings using qiyās become speculative and probabilistic in terms of representing the intentions of the Lawgiver.Footnote ¹⁵⁰ The probabilistic element in qiyās can arise in interpretations of rules in the sharīʿa texts as a large number of legal directives of the Qurʿān and Sunnah are broad and general, instead of specific injunctions.Footnote ¹⁵¹ The rulings derived from using uṣūl al-fiqh have also been critiqued for not being able to address the needs of the contemporary era of statutory legislation adequately.Footnote ¹⁵²

The need to use maṣlaḥa and maqāṣid in rulemaking and reviving Islamic law has been discussed since the eleventh century as scholars started to express concerns about the ability of dominant legal methodology of uṣūl to produce appropriate positive law for the needs of Muslim societies.Footnote ¹⁵³ However, the purposive approach is deemed to be inappropriate for deriving specific rulings because the concepts of maqāṣid are broad and general. Arguing that the goals of the Lawgiver (God) are difficult to ascertain and that they are perfectly assimilated in the textual rules, some scholars supporting the textual uṣūl approach contend that discovering the objectives and their application to derive rulings requires recourse to human rationality and judgment.Footnote ¹⁵⁴ Thus, use of the maqāṣid approach involves juristic speculation because different interpretations can be derived from the objectives of the sharīʿa that are expressed broadly and in general terms.

The expansive use of maṣlaḥah to derive laws is further criticized for using human reasoning without constraints, which can lead to diversions of new rules from the rules and ethics entailed in the sharīʿa revealed text.Footnote ¹⁵⁵ The critics contend that subjectivity involved in using the maqāṣid approach can lead to an unprincipled legal system that entails a multiplicity of interpretations reflecting various individualistic preferences. For example, Shalakany maintains that the purposive approach to deriving laws is strained as reinterpretation of the scripture is used to rationalize modern legal views that are not traditionally accepted.Footnote ¹⁵⁶ While the maqāṣid approach makes Islamic law more adaptable to social change, doubts about the correct comprehension of the goals of revelation and its interpretive expansiveness by using rational reasoning weakens the links to sharīʿa revealed texts.

Even though the maxims form an important part of Islamic legal theory and are closely linked to sharīʿa revealed texts, they are not used extensively in present-day law-making. Discussions on the role of qawāʿid in the overall Islamic legal theory are relatively scant during contemporary times.Footnote ¹⁵⁷ With the exception of a few studies that discuss the implications of qawāʿid in the modern era such as KamaliFootnote ¹⁵⁸ and Zakariyah,Footnote ¹⁵⁹ most contemporary literature on qawāʿid examines the historical discourses. Kamali is among the few who suggest using maxims in contemporary times and asserts that the language and style of contemporary statutes and civil codes are similar to legal maxims.Footnote ¹⁶⁰ Thus, for some areas of Islamic law such as personal law and the law of transactions, maxims can play a supplementary role to substantive legislation.

Dworkin’s Legal Standards and Islamic Legal Theories

As noted, Dworkin defines policies as legal standards that represent goals related to improvement in some economic, political, or social feature of the community.Footnote ¹⁶¹ Policies are political decisions made through some political process that protect or advance some collective goal of the community as a whole.Footnote ¹⁶² The suggestions of the positivists of judging hard cases based on efficiency and the focus of normativists on using equity and justice for the same represent the policies that reflect the collective goals of a society. Because maqāṣid are also presented as the goals of sharīʿa that enhance human welfare, they are similar to policies. The maqāṣid are expressed not only as the overall objective of achieving societal welfare (maṣlaḥa) but also as the specific goals of protecting and enhancing life, religion, intellect, progeny, wealth, and dignity for all individuals. Furthermore, there are other maqāṣid such as justice and equity and specific goals related to economic transactions identified by contemporary scholars.Footnote ¹⁶³ Because maqāṣid is akin to policy, it falls in the realm of political decision.

While policies identify and establish collective goals, principles in Dworkin’s theory are concerned with establishing individual rights.Footnote ¹⁶⁴ Principles represent moral standards related to justice or fairness and entail general and fundamental maxims of law representing the substantive values and purposes of a community.Footnote ¹⁶⁵ Dworkin highlights the need to use the principles of fairness to ensure that individual rights are protected.Footnote ¹⁶⁶ A key function of the principles is to translate broader policy goals into more specific standards that can used to develop rules. Islamic legal maxims (qawāʿid al-fiqh) are similar to the normative principles identified by Dworkin as they provide the standards governing different aspects of Islamic law. Whereas a few maxims provide guidelines on the methods of law-making such as custom (ʿurf) and concession (rukhṣa), some other qawāʿid include various principles that are related to the goals of efficiency and justice in contracts.

Rules in normative and positive legal theories stipulate specific notions that relate to validity and exist in an ‘all or nothing’ fashion.Footnote ¹⁶⁷ Among the five categories of rulings in Islamic defining law (ḥukm taklīfī), the obligatory (wājib) and the prohibited (ḥarām) would belong to Dworkin’s concept of rules as these have legal force and can be adjudicated in courts. Accordingly, the legal rules of Islamic jurisprudence (fiqh) have similar binary outcomes of being obligatory/non-obligatory or valid/invalid. These legal rules can be derived by using different methods depending on the strength of the links of new cases to the effective cause in the sharīʿa revealed texts.

Islamic Normative Legal Theory: An Integrated Framework

The moral underpinnings of Islamic law are entailed in the sharīʿa revealed texts and are manifest in maqāṣid and the maxims (qawāʿid). While the maqāṣid provides the broader normative policy goals and purposes of sharīʿa, the legal maxims entail specific principles reflecting legal and moral values. Most contemporary discussions on introducing ethics in Islamic law focus on the maqāṣid approach.Footnote ¹⁶⁸ The maxims are not presented as an integral part of the legal theory and are either not used or used in an ad hoc manner in deriving rules. From a normative legal theoretical perspective, the maqāṣid approach raises a couple of issues. First, because maqāṣid represent the overall policy goals of sharīʿa, the approach is similar to the positivist legal theorists who identify normativity in terms of policies rather than principles.Footnote ¹⁶⁹ Second, using maqāṣid as a policy objective for rulemaking is criticized for being too broad for deriving specific rules which can introduce subjectivity and speculative induction.

Dworkin’s normative theoretical approach suggests using principles for arriving at judgments in hard cases as they provide relatively more specific moral standards compared to policy goals that require broad interpretive discretion.Footnote ¹⁷⁰ Using Dworkin’s approach would require integrating the maxims (qawāʿid) in an Islamic normative legal theoretical framework as they play an important role in translating the broader goals of maqāṣid into specific principles that then can be used to guide the development of rules utilizing different methods of uṣūl. In particular, qawāʿid reflect “substantive canons of construction” relating closely to “the structure and substance of positive law”Footnote ¹⁷¹ and they can be used as persuasive principles and evidence in the development of Islamic law.Footnote ¹⁷² Using the maxims as principles in rulemaking under the integrated normative approach mitigates the probabilistic nature of Islamic positive law (fiqh) derived by using different uṣūl methods independently in cases with weak links to sharīʿa revealed texts on the one hand, and minimizes the broad subjectivity used in the interpretations of maqāṣid on the other hand.

As noted, a key issue of Islamic law concerns its legitimacy or scriptural validation that relates to the degree of affinity of new rules to the sharīʿa revealed texts. In the Islamic normative legal theoretical framework, legitimacy can take the form of legality and normativity, whereby in legal legitimacy new rules are linked to the legal rules of the sharīʿa texts and in normative legitimacy rulings are derived by using the maqāṣid and maxims (qawāʿid). The new rulings linked to the legal rules of sharīʿa revealed texts would have both legal and normative legitimacy because the latter are considered to be inherently ethical.

Given the variety of new cases that can arise, their legitimacy can be discussed in light of the strength of relationships of the cases with the sharīʿa revealed texts and the application of different legal methods for rulemaking. Accordingly, the following four broad categories of cases can be identified:

1. 1. Clear effective cause. For cases that have a clear effective cause (ʿilla) in the sharīʿa revealed texts, the method of qiyās under uṣūl can be used to derive rules. Because the new rulings will have direct links to the rules of texts that are considered inherently moral, they would have both legal and normative legitimacy.

2. 2. Ambiguous or weak effective cause. In cases when the link between the new case and effective cause in sharīʿa revealed texts is weak or ambiguous, then the jurists can interpret the text in different ways. Employing the deductive method of qiyās mechanically without using other evidence from the sharīʿa is likely to result in the use of discretion that can produce rulings that are devoid of sharīʿa moral foundations. Legal legitimacy will be relatively weaker due to the new cases lacking direct references to the texts. In these cases, the use of juristic preference (istiḥsān) would be an option and decisions can be supported by other normative evidence from the sharīʿa revealed texts. In this regard, both policies/maqāṣid and principles/qawāʿid can be used to support law-making. Doing so will enhance the overall legitimacy of the rules because adding normative legitimacy will compensate for weaker legal legitimacy. Furthermore, using maxims to derive the rules under istiḥsān will limit the discretion used by scholars because their decisions will be governed by compliance with sharīʿa principles.

3. 3. Nonexistent effective cause. In new cases that do not have any reference or effective cause (ʿilla) in sharīʿa revealed texts, the appropriate uṣūl method to use will be maṣlaḥa mursala (unrestricted interest) which involves considering the maṣlaḥa and maqāṣid in rulemaking. However, because policies (maqāṣid) are broad in scope, the principles outlined in the maxims (qawāʿid) can be considered to develop the rules. While the maqāṣid can provide general welfare-related policy goals, maxims (qawāʿid) would ensure that specific issues relating to the goals such as welfare and justice are met. This will restrain the discretion of jurists in deriving rules because they will be guided by maqāṣid in general and qawāʿid in particular. The legitimacy of rules derived by maṣlaḥa mursala and maxims is normative because legal links to the sharīʿa revealed texts are absent.

4. 4. Exceptional cases. In some exceptional cases, concession (rukhṣa) can be used to temporarily abandon or dilute the accepted rules based on the maxims of necessity and hardship. As noted, the rulings for exceptional cases are conditional and expire when the necessity or difficulty ceases to exist.Footnote ¹⁷³ While rulings based on concession (rukhṣa) do not have legal legitimacy as the rules of the sharīʿa revealed texts are suspended, they have normative legitimacy based on the maxims related to enhancing welfare (maṣlaḥa) and mitigating harm (mafṣada).

The Islamic normative legal theoretical perspective presented above provides a coherent framework that combines the three Islamic legal methodologies to derive rules. Specifically, the normative legal theoretical framework introduces the intermediating role of qawāʿid principles to reconcile the broad ethical policies of maqāṣid with different rulemaking methods of uṣūl. The framework provides a structure to assess the legal and normative legitimacies of Islamic positive law (fiqh) derived by using different methods. In cases with a clear effective cause, the derived rules using qiyās fulfil both legality and normative legitimacy conditions due to the virtue of their closeness to sharīʿa revealed texts.

For intermediate cases with ambiguous or weak effective causes, the method of juristic preference (istiḥsān) can be used for rulemaking. Because maqāṣid and qawāʿid are used to derive rules, they will have normative legitimacy and varying degrees of legal legitimacy. For new cases that do not have any corresponding effective cause in the sharīʿa revealed texts, the rulings derived by using unrestricted interest (maṣlaḥa mursala) that are guided by maqāṣid and qawāʿid will have normative legitimacy, but no legal legitimacy. Similarly, rules derived by concession (rukhṣa) for exceptional cases of necessities and hardships are also based on legal maxims and have normative legitimacy and no legal legitimacy. Whereas the rulings derived by using different methods under the Islamic normative legal theoretical framework will have varying degrees of legal legitimacy depending on the links of new cases to the sharīʿa revealed texts, all of them will have normative legitimacy.

Other than enhancing the legitimacy of rules derived by using uṣūl methods in cases that have weak linkages to the rulings of Sharia revealed texts, the normative legal theoretical framework reduces subjectivity and speculative interpretations that appear in the maqāṣid approach. While rationality will still exist in using the Islamic normative legal theory because the implications of maxims (qawāʿid) on rulemaking have to be interpreted, the subjectivity is expected to be much lower than in the maqāṣid approach as the use of reason is guided by ethical principles entailed in the maxims.Footnote ¹⁷⁴ In other words, whereas the maqāṣid approach uses unbounded rationality to interpret the broader policy goals, the Islamic normative legal theory uses bounded rationality by applying the relevant maxims which enhances the moral legitimacy of the derived rules.

While the integrated Islamic normative legal theory presented uses Dworkin’s normative legal theoretical framework, they differ in a few ways. First, although the Islamic normative legal theory adopts Dworkin’s theoretical constructs of policies, principles and rules, the underlying ontological and ideological foundations of these concepts are significantly different in each of these theories. Whereas Dworkin’s legal theory represents liberal legal philosophy and notions of justice,Footnote ¹⁷⁵ the Islamic normative legal theory is founded on existing Islamic legal theoretical paradigms and values. Thus, the Islamic normative legal theory developed in this article uses Dworkin’s analytical framework technically without adopting its underlying ideological underpinnings. Thus, the second difference that relates to the sources of law and ethics: in Dworkin’s theory, the institutions of legislature and adjudication are sources of law reflecting the will of people.Footnote ¹⁷⁶ Similarly, the policies and principles are also determined by the legislature through a democratic process and represent “political morality.”Footnote ¹⁷⁷ The sources of Islamic law, however, are divine and linked to the sharīʿa revealed texts (Qurʿān and Sunnah). Scholars use uṣūl methods to link the new rulings to those in the sharīʿa revealed texts, and maqāṣid and qawāʿid reflecting the policies and principles respectively are also derived from these revealed sources representing religious morality. The final difference concerns the scope of law-making. While recognizing that the legislature enacts statutes, Dworkin’s normative theory is concerned mainly with how judges acting as deputy legislators could use principles to interpret rules in disputes.Footnote ¹⁷⁸ The Islamic normative legal theory focuses mainly on how jurists can develop new ethical laws that can also be used in the adjudication of cases.Footnote ¹⁷⁹

Environment

Dealing with environmental issues has become important during contemporary times due to the adverse impact of economic activities on nature and human lives and the impending climate crisis. A large body of literature discusses various aspects of how the laws and legal systems can deal with the challenges related to climate change.Footnote ¹⁸⁰ At the global level, the multilateral environmental agreement was initiated in 1992 in the form of the United Nations Framework Convention on Climate Change and culminated in the Paris Agreement in 2015.Footnote ¹⁸¹ The Paris Agreement represents a legally binding international treaty to combat climate change by limiting the global average temperature increases to 1.5⁰C above pre-industrial levels.Footnote ¹⁸² At the national level, countries are adopting policies and laws related to climate change and environmental sustainability.

Given the challenges that climate change and environmental degradation pose to natural systems and human lives, some international and national sharīʿa jurisprudential bodies have come forward with resolutions on environmental-related issues. For example, the International Islamic Fiqh Academy issued a resolution in 2009 on environmental conservation forbidding “any act or disposal that could cause harm or abuse to the environment.”Footnote ¹⁸³ Similarly, the Ulama Council of Indonesia (Majelis Ulama Indonesia, widely known as the MUI) issued rulings that make protecting and conserving endangered species mandatoryFootnote ¹⁸⁴ and prohibits “burning of forests and land that can cause damage, pollution, harm to other persons, adverse health effects, and other harmful effects.”Footnote ¹⁸⁵ The methodologies used to derive the resolutions of the MUI on endangered species and burning forests and land are analyzed further in light of the Islamic normative theory presented above.

The first step in applying the Islamic normative theoretical framework is to explore the environmental issues in the sharīʿa revealed texts. There are numerous references to various aspects of nature and environment in the Qurʿān and Sunnah.Footnote ¹⁸⁶ The basic premise related to nature starts with the notion that God is the creator and ultimate owner of the universe and humans should act as viceregents or trustees.Footnote ¹⁸⁷ The teachings from sharīʿa revealed texts indicate maintaining balance, moderation, conservation, harmony and care when dealing with nature and creation.Footnote ¹⁸⁸ Examples of verses of the Qurʿān related to nature and environment include “Eat and drink the sustenance God has provided and do not cause corruption in the land”Footnote ¹⁸⁹ and “As for the earth, We have spread it out, set firm mountains on it, and made everything grow there in due balance.”Footnote ¹⁹⁰ Similarly, numerous sayings of the Prophet encourage Muslims to preserve, promote and avoid misusing nature. For example, one ḥādīth (saying of the Prophet) encourages planting treesFootnote ¹⁹¹ and another one discourages wasting water even when it is abundantly available.Footnote ¹⁹²

Although the Qurʿān and Prophetic sayings provide general ethical guidance on protecting the environment, they do not represent specific legal injunctions on the environment. Because there are no clear prohibitions on burning forests and land or protecting endangered species in the sharīʿa revealed texts, these environmental issues would fall under the ambiguous or weak effective cause category. This implies that using qiyās to derive rulings is not feasible. The appropriate method would be to use juristic preference (istiḥsān), which calls for considering the maqāṣid and applying the principles of qawāʿid to derive rulings.

Whereas protecting the environment is not one of the original maqāṣid al-sharīʿa, contemporary scholars have tried to link it to maqāṣid in two ways. First, preserving the environment is considered necessary for protecting and enhancing the five maqāṣid of faith, life, intellect, posterity, and wealth.Footnote ¹⁹³ In other words, protecting the environment becomes an essential policy tool to achieve the maqāṣid. Second, there are suggestions to expand the scope of maqāṣid beyond the traditional elements and include the protection of the environment as an additional maqṣad. Given ample evidence in the sharīʿa revealed texts that call for keeping the balance and protecting the nature and environment, protecting environment can be considered as an additional maqṣid. Footnote ¹⁹⁴ Both perspectives imply that protecting the environment is an important policy consideration in framing Islamic laws during contemporary times.

There are various qawāʿid that provide specific ethical principles that can be used to derive rulings on environmental issues. The relevant maxims relate to minimizing harm or damage (ḍarar) such as “harm has to be eliminated,” “averting harm takes precedence over achieving benefit,” “to repel public damage a private damage is preferred,” and “severe damage is made to disappear by a lighter damage.”Footnote ¹⁹⁵

Although the resolutions of the MUI on environmental issues do not explicitly identify protecting the environment as one of the maqāṣid, they use the sharīʿa revealed texts and qawāʿid to derive rulings. The resolutions start with presenting several Qurʿānic verses and prophetic sayings on the environment and then a section identifies some relevant maxims.Footnote ¹⁹⁶ For example, for the ruling that makes protection of endangered species mandatory the MUI identifies the following maxims: “all harms should be avoided as far as one can,” “a harm should not be rid of by bringing in another harm,” and “a specific harm should be borne to avoid a general (large-scale) harm.”Footnote ¹⁹⁷ Similarly, in deriving the ruling that forbids the burning of forests and land, the MUI refers to the “all harmful and useless things must be abolished” and “preventing harm brought upon by an unlawful deed shall take precedent over the pursuit of benefit”Footnote ¹⁹⁸

Because there are no specific legal rulings on protecting endangered species or forbidding burning the forests and land in the sharīʿa revealed texts, the rulings of prohibitions by MUI have weak legal legitimacy. However, the rulings have strong normative legitimacy because they are derived from the general ethical guidelines on the environment from the Qurʿān and Sunnah, the implications of the maqāṣid and principles entailed in the legal maxims.

Organ Donation and Transplant

Organ donation and transplant is an emerging issue in the area of biomedical ethics.Footnote ¹⁹⁹ The discussions on organ transplants from an Islamic point of view are diverse and depend on various factors. For example, organ transplants can be autograft (transplanting organs or tissues in the same body) or allograft (transplanting organs or tissues from one person to another).Footnote ²⁰⁰ In case of allotransplant, the rulings would depend on whether the donor is alive or cadaveric in which the donor is deceased or brain dead.Footnote ²⁰¹ Furthermore, there may be restrictions on the type of organs that can be donated or transplanted.Footnote ²⁰² For example, rulings would be different for organs related to the reproductive and non-reproductive systems.Footnote ²⁰³

There are three different opinions on organ donation and transplant among contemporary Islamic scholars: prohibited, contingently permissible under conditions of necessity, and generally permitted.Footnote ²⁰⁴ While scholars prohibiting organ transplants link their arguments to sharīʿa revealed texts related to human dignity and ownership of the body, the camp supporting contingent permissibility uses the maxim of necessity and allows organ transplants in cases of necessities such as saving lives. Islamic jurisprudential bodies and scholars who forbid organ transplants belong mainly to the Indo-Pakistani regions. For example, in the 1960s, Mufti Muhammad Shafi from Pakistan issued a ruling forbidding organ transplants. While the Islamic Fiqh Academy of India allowed kidney transplants by a living donor, it prohibited cadaveric transplant of the organ.Footnote ²⁰⁵ Some jurisprudential bodies such as the International Islamic Fiqh Academy, European Council for Fatwa and Research, and Fiqh Council of North America approve cadaveric transplants of non-reproductive organs. Scholars and jurisprudential bodies who allow general permissibility apply the principle of maṣlaḥa in terms of benefits outweighing the harms to support their views.Footnote ²⁰⁶

An initial step in determining the appropriate legal method that can be used under the Islamic normative legal theoretical perspective would be to identify whether a similar effective cause exists in the sharīʿa revealed texts. Organ donations are relatively new practices and there is no explicit mention of these issues in the Qurʿān and Sunnah.Footnote ²⁰⁷ Thus, the case of organ donations and transplants would fall under the category of nonexistent effective cause, and the appropriate method to derive their rulings would be to use maṣlaḥa mursala.

Scholars arguing against organ donations, however, use the traditional methodology of qiyās and link organ donation and transplants to sharīʿa revealed texts.Footnote ²⁰⁸ Because various verses of the Qurʿān highlight the sanctity of humans, they argue that donating body parts violates this high status and sanctity. They assert that Islam has given humans a position of honor and dignity and that individuals do not have the right to change this status.Footnote ²⁰⁹ Another key conceptual issue in the arguments on organ transplants relates to the ownership of the human body. Those arguing against organ donations and transplants assert that the ultimate owner of the human body is God, and therefore humans do not have the right to donate its parts.Footnote ²¹⁰ Furthermore, they also do not support the donation of organs as it mutilates human bodies.Footnote ²¹¹

Recognizing that there are no specific legal rulings regarding organ donations in the sharīʿa revealed texts, the Islamic jurisprudential bodies and scholars permitting organ transplants use the method of maṣlaḥa mursala and employ the notions of maqāṣid and qawāʿid to derive their rulings. The relevant maqāṣid for organ donation would be the protection of life and posterity.Footnote ²¹² The International Islamic Fiqh Academy identifies utility to the beneficiary such as remaining alive or restoring a primary bodily function, as a key determinant of allowing organ transplants.Footnote ²¹³ However, the maqṣid of protecting posterity, which also relates to safeguarding lineage, would imply prohibiting the donation and transplanting of organs related to reproductive systems, such as sperm, testicles, fetus, uterus, and ovum.Footnote ²¹⁴

The legal maxims used as principles to permit donation and transplant of non-reproductive organs include “necessity facilitates ease,” “necessities render the prohibited permissible,” “harms should be eliminated,” “in the presence of two harms the least harmful must be chosen,” and “a minor harm is tolerated for the sake of a major gain.”Footnote ²¹⁵ Because the harm to the deceased donor is minimal compared to the life-saving benefit of the recipient, the maxims support the cadaver donation of organs. For example, the Fiqh Council of North America cites the maxim of removing harm to allow cadaveric donation of non-reproductive organs.Footnote ²¹⁶ However, the maxim “harm cannot be offset by another harm” implies that the organ donor should not be harmed in the process of donation. Thus, vital organs such as a heart cannot be donated by a living person because it will cause the death of the donor.Footnote ²¹⁷ The jurisprudential bodies and scholars permitting organ donations also recognize human dignity and conclude that organs cannot be sold as commodities for a price.Footnote ²¹⁸ They also acknowledge that the ultimate owner of the body is God, but they are of the opinion that a person has legal authority over her body.Footnote ²¹⁹ Accordingly, they opine that cadaveric donations have to be authorized either by the deceased before her death or by the heirs after her death or by concerned authorities in case the deceased has no heirs.Footnote ²²⁰

While the scholars prohibiting organ transplants use qiyās and link their reasonings to concepts of creation and status of human lives from sharīʿa revealed texts, there is no explicit mention of organ donation in the Qurʿān and Sunnah.Footnote ²²¹ The relatively weak direct links to sharīʿa revealed texts imply that using qiyās to derive rulings is conjectural and likely leads to inaccurate legal rulings. From the Islamic normative legal theoretical perspective, the legal and ethical legitimacies of the rulings prohibiting organ donations are relatively weak. As indicated, the appropriate method to derive rulings would be to use maṣlaḥa mursala because there are no explicit legal rules on organ donations in the sharīʿa revealed texts. The contemporary rulings permitting organ donations and transplants using this method have weak legal legitimacy but derive normative authority as they reflect the values of maqāṣid and principles of qawāʿid. Thus, from the Islamic legal theoretical perspective, the rulings permitting organ transplants have relatively stronger normative legitimacy than the rulings prohibiting organ donations.

Islamic Finance

Islamic finance was initiated in the 1970s to provide services to Muslims who would not engage with the conventional financial sector due to their religious convictions. A key feature of Islamic finance is the use of Islamic law to structure financial products. Financial transactions are governed by the principle of permissibility (ibāḥah), which maintains that all activities are allowed except those prohibited by the sharīʿa.Footnote ²²² Prohibitions in economic transactions can be broadly classified as ribā and gharar. Footnote ²²³ Although ribā (literally meaning increase or growth) is commonly associated with interest on loans, it has much wider implications and can take different forms. A common premise in the prohibition of ribā lies in the unequal trade of values in exchange.Footnote ²²⁴ Gharar is translated as excessive uncertainty and also implies ignorance, gambling, hazard, and fraud.Footnote ²²⁵ Prohibited gharar relates to legal ambiguities in contracts and uncertainties in the object of sale and outcomes. Given that interest-based loans are prohibited, Islamic financial institutions have developed products using various permissible contracts such as sale and leasing. Islamic finance industry has expanded globally and become systematically significant in many jurisdictions with global assets reaching US$ 3.88 trillion in 2024.Footnote ²²⁶ While the industry has grown rapidly in a relatively short period of time, it is criticized for applying sharīʿa principles in formal legalistic ways and not contributing to the ethical and social objectives of maqāṣid. Footnote ²²⁷

To understand the status of Islamic law used in financial transactions in light of the Islamic normative legal theoretical perspectives, the methodological approach related to the positive law applied in practice needs to be identified. The main approach taken by Islamic finance is to replicate conventional financial products by using multiple contracts to come up with similar risk-return features of the latter in substance.Footnote ²²⁸ This is usually done by using legal stratagems (ḥila) and eclectic methods of selection (takhayyur) and patching (talfīq) whereby opinions of past scholars from different schools that fit a product structure are chosen and/or combined.Footnote ²²⁹ The approach of using ḥila in Islamic finance has been to focus on formal legal structures, rather than substance.Footnote ²³⁰ Because the new rulings derived through eclectic ijtihād depend on the past rulings of scholars and have indirect approval from sharīʿa revealed texts through the principle of permissibility,Footnote ²³¹ they have weak legal and normative legitimacies.

Applying the Islamic normative theoretical framework would imply using other methods to derive rules. Because the features of Islamic financial products do not have specific references in sharīʿa revealed texts, the legal framework applied in Islamic financial transactions would fall under ambiguous or weak effective cause. Thus, the appropriate methods that would be applied to develop Islamic financial products should be istiḥsān or maṣlaḥa mursala. Using these methods to derive rulings related to financial products would provide normative legitimacy as they would fulfil the maqāṣid and apply the principles of qawāʿid.

The relevant maqāṣid related to economic and financial transactions are the protection of wealth and life (livelihoods) and specific maqāṣid related to economic transactions. As indicated, Ibn Ashur identifies the maqāṣid for economic transactions as marketability, transparency, preservation, durability and justice.Footnote ²³² The notion of justice in transactions is viewed in terms of balancing the implementation of rights and obligations in contracts.Footnote ²³³ In exchange contracts, this would involve commutative justice or equality in the values exchanged between parties and avoiding unfair exploitation.Footnote ²³⁴ Another way in which justice can be understood in financial contracts is to have a balanced distribution of risks and returns.Footnote ²³⁵

Given the maqāṣid of protecting lives and wealth and ensuring justice in economic transactions, the Islamic normative legal theoretical framework requires using principles entailed in the qawāʿid to derive rules. Several maxims apply to financial transactions. A key maxim that is relevant to evaluating transactions states “In contracts, greater weight is given to intention and meaning than words and forms.”Footnote ²³⁶ This maxim “substance over form” stresses examining the substance rather than the form in assessing the nature of contracts. Two key maxims related to justice and linking risks and return are “benefits go with liability” and “liability accompanies gain.”Footnote ²³⁷ The first maxim is based on a Prophetic saying and implies that the party enjoying the benefit of ownership of an asset in terms of returns should also bear its risks.Footnote ²³⁸ For instance, the implication of the maxim for a leasing contract is that the lessor should be responsible for any damages to the asset leased out. Rulings derived by using these legal maxims embed justice in transactions and would have strong normative legitimacy.

Although the legal legitimacy of Islamic financial products is weak due to ambiguous or weak effective cause as there are no direct references in the sharīʿa revealed texts, applying istiḥsān or maṣlaḥa mursala that considers the maqāṣid and qawāʿid in rulemaking would provide normative legitimacy. In some exceptional cases, such as necessity (ḍarūra) and legitimate commercial need (ḥāja),Footnote ²³⁹ concessions (rukhṣa) can be applied by abandoning accepted sharīʿa rules by applying the maxims “removal of hardship,” “hardship begets facility,” and “necessities render the prohibited permissible.”Footnote ²⁴⁰ In these cases, the rulings would have no legal legitimacy but have normative legitimacy as the maxims are used to remove hardships.

To assess the practice of Islamic finance in light of the Islamic normative theoretical framework, an example of a financial product used in the industry is examined. Because Islamic banks cannot use interest-bearing debt contracts to raise funds on the liability side, many financial institutions use an agency (wakālah) contract to do so. From a sharīʿa legal point of view, the investor owns the funds as a principal that is managed by the bank acting as an agent (wakil) for a fee. According to the maxims linking risks and returns, any profit or loss from the investments made would accrue to the investors as they own the capital.Footnote ²⁴¹ However, in practice, the wakālah-based deposit is structured in a way that has the same economic substance as an interest-bearing deposit in conventional banks. To do this, an expected return (for example, 5 percent) is identified and a clause is introduced in the contract stipulating that any return above the expected level would accrue to the bank as a reward and incentive for good performance. The implication of this clause is that while the bank keeps the profit beyond the expected rate on the upside, lower returns and losses are borne by the investors in downturns. In practice, the bank usually ends up paying the client the expected return (in this case, 5 percent).

The agency-based product structure presented above may be acceptable under the principle of permissibility. However, the practice raises some ethical concerns. Under the Islamic normative theoretical framework, the moral issues of the agency-based investment product can be assessed in light of the maqāṣid and principles identified in the qawāʿid. While the relevant maqāṣid related to finance would be the protection of wealth and ensuring justice in transactions, several maxims provide more specific guidelines for rulemaking.

The maxim “substance over form” stipulates that a product should be evaluated by examining its economic substance, not its form. Using the maxim to assess the wakālah-based deposit product shows that the economic substance of the product is at best akin to an interest-based debt contract or even worse than it from the depositor or investor’s perspective. Specifically, if the bank pays the fixed expected rate to the investors, the economic substance of the contract becomes similar to an interest-bearing loan, which is prohibited by sharīʿa and thereby violates the legal legitimacy. However, the economic substance of the product structure is worse than an interest-bearing loan for the investor if the stipulations of the agency contract make the investors bear the downside risks but not benefit from the upside gains due to capped returns. In either of these cases, the product violates the maxims linking risks and returns that govern justice in financial transactions.

The example of the practice of Islamic finance highlights the differences in applying Islamic law positively and normatively. While the clause of capped returns as incentives for banks in agency contracts may be acceptable from a positive legal perspective based on the principle of permissibly, the structure creates an anomaly when viewed from the normative legal perspective. Specifically, the product lacks normative legitimacy as it contradicts the legal maxims that link returns to risks, which makes it unjust for the investors. Furthermore, the maxim for rulemaking requires assessing the substance of contracts to ensure that justice prevails in financial transactions. This implies that the stipulation capping returns at an expected rate cannot be added as a feature of the product and the investors should enjoy the benefits of upside gains and also bear the losses if they occur. Applying the Islamic normative theoretical perspective would ensure justice in contracts and the product structure will have both legal and normative legitimacies.