Of the several possible meanings of formalism, I relate to it here as pertaining to the justification of knowledge claims and/or the making of socio-political decisions using strictly rule-determined procedures, often in response to systems imperatives. Of particular concern with reference to the workshop theme are the ways in which such restrictive formalism negatively impacts life-world decision-making, denies a role to judgement, and erodes intersubjective communication and responsibility. I address these concerns from a critical hermeneutic standpoint, drawing on the complementary insights of Jürgen Habermas and Han-Georg Gadamer. With regard to Habermas, I contend that while his critiques of positivism and of instrumental/systems rationality constitute a major contribution to diagnosing the limitations of formalism and to validating the need to accommodate ethics and intersubjectivity as indispensable factors in reclaiming the life-world, his response is marred by its failure to do justice to the reality of reason’s situatedness. To correct for this, we need to have recourse to key themes in Gadamer’s philosophical hermeneutics; in particular, his recognition of the ways in which our hermeneutic situation conditions the possibilities at our disposal, his emphasis on the indispensability of phronesis (or good judgement) in attuning us to what the situation requires by way of a response, and the importance of conjoint dialogical inquiry as a basis for deciding a way forward that is appropriately attuned to the situation both ethically and epistemically. It is hoped that elaboration on the foregoing themes will pave the way for fruitful dialogue about the convergences and differences between critical hermeneutics and phenomenology in regard to the limits of formalism and the corresponding importance of judgement, responsibility and intersubjectivity for responding effectively to the challenges posed by formalist intrusions on the life-world.