Chapter 1 - Introduction to legal systems (2016)

Apunte Inglés
Universidad Universidad Pompeu Fabra (UPF)
Grado International Business Economics - 1º curso
Asignatura Introduction to business law
Año del apunte 2016
Páginas 12
Fecha de subida 20/04/2016 (Actualizado: 20/04/2016)
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I.
Introduction to legal systems INDEX What is law? ..................................................................................................................... 2 Why do we need the law for? .......................................................................................... 4 Production of legal rules:.................................................................................................. 5 COMMON LAW ............................................................................................................. 5 CIVIL LAW ...................................................................................................................... 8 SOCIALIST LAW ........................................................................................................... 10 ISLAMIC LAW .............................................................................................................. 10 LEGAL INTERPRETATION ............................................................................................. 10 Seminar 1: Common and civil law .................................................................................. 11 Summary ......................................................................................................................... 12 DIFFERENCIES CIVIL AND COMMON LAW .................................................................. 12 THE SEMINAR.............................................................................................................. 12 1 avillagrasa IBE, 1st year - 2nd Term What is law? They are used to normalize such that everybody behaves the same. If you don’t follow the contract (agreement) it has consequences (sometimes legally ones). They should make everyone fairly (in justice terms). Taxes are used to correct inefficient markets (to address externalities or redistribute rents).
{Equality is not always fair nor efficient} Not complying with a law leads to a punishment, it has legal consequences that act as an enforcement. This is why we follow the rule. Not following it has a consequence that we don’t like. If we want the people to follow a rule the enforcement (being caught) has to have a very high probability and penalty has to be high too. If you can’t pay you may not care about the law because you can’t face the consequences (can’t pay).
In our system there’s an authority that can decide which are the rules to be followed.
This authority is decided by the society (in our case the legislative power).
{We comply a legal norm because the cost of no compliance is higher is than the benefit of not following it} Enforcement is very expensive so, if we’re policy makers, we have to take into account: - Probability of enforcement - Administrative cost - Quantity of legal consequences This means that we can’t spend more than what we get (if few people disrespect a norm there’s no sense in putting a lot of policemen to control it  enforce it).
Legal rule: A behavioural rule containing a general binding order (obligatorietat) for all the members of a community because it’s been issued by bodies or social groups that have given the power to an authority. We can have more than one authority 2 avillagrasa IBE, 1st year - 2nd Term (Catalan, Spanish & European legal system). In our system the legislative system is not the same as the juridical system.
1. Normative scheme 2. Legitimacy What is needed for an action to be binding 3. Enforcement Types of norms PRIMARY RULES: Rules of conduct. What you must/mustn’t do.
They are legally enforced SECONDARY RULES: They are power conferring rules. They are rules that give authority. They say WHO can be the authority.
3 avillagrasa IBE, 1st year - 2nd Term Why do we need the law for? They allow trusting each other. Without them we wouldn’t cooperate with others because we wouldn’t rely on others. They also provide security. With economic exchange we need security because, for example, if I’m an online seller, I will sell my product only AFTER the buyer has paid. This means that my behaviour, my action, strategies are conditioned by the other parties.
If we don’t know how the norm will be applied, there will be a lot of uncertainty because since we can’t predict what’s going to happen we will not include it as a cost.
FUNCTIONS OF THE LAW - Provide legal certainty - Facilitate planning - Maintain order and keep peace Ex: As we said we take decisions depending on the regulation, so if we change the law we will make a lot of people be worst off. For example, at first, everybody could smoke in restaurants. Then they changed the law and it was only allowed to smoke in smoking areas. The owners had to invest a lot of money in making those areas.
Finally smoking was forbidden totally which created a very large lose to restaurant owners. This is an example of bad regulation.
4 avillagrasa IBE, 1st year - 2nd Term Production of legal rules: Most of the countries have similar norms. The difference is where these regulations come from. In civil law the regulation comes from legislation powers and in common law it comes from judges.
- Common law (USA, Canada, India, England and Ex-English colonies) - Civil law (Europe, Latin-America, Asia in general and some parts of Africa) - Socialist law - Islamic law - Religious law (Saudi Arabia and some near-orient area) - Mixed systems (South Africa) In US (Common law) all the cases are public and can be checked i n the court’s website. However, in Spain (Civil law) it’s very difficult to find free reports from the court.
COMMON LAW The judge makes a law for every case, depending on the circumstances. In the past the king had foreseen some cases but if something unforeseen happened you had to go to be given equity remedies (solució). They relied on a judge. There wasn’t any specific law so the judge decided. In summary, if there isn’t any specific law, the judge will “create” it.
5 avillagrasa IBE, 1st year - 2nd Term To decide the judge looks at similar solved judgements (precedents), and decides to proceed the same way or not (which has to be justified). There’s a part defending which will present all the precedents in favour of his client, and the other part the other way around. There’s also a jury (normal people who make a verdict) and the judge makes the decision depending on their verdict.
HISTORY In the past, if something happens to you (incident), you could take legal actions/writs and obtain court remedy (what the king had said). But if there wasn’t a writ but that something had to be protected too, you could go to the equity court, which would make a judgement depending on your situation. The Court of Chancrey existed to solve the cases without writs.
THE SYSTEM A good lawyer in this system has to be very good at seeing which are the similarities and the differences with other cases. Before all the case law was in yearbooks, but now we have all the data online and in reports. He also has to know how to argue.
PRECEDENTS: - Binding precedents: from the Supreme Court and higher courts. They must be followed. If they are not, the judgement is going to be annulated.
- Persuasive precedents: they are from lower courts. They are valid arguments but they don’t have to be strictly followed. It has to be argued that the situation is not the same. Also if the court that solved a similar case was in the same level, it’s not going to be bounding even though they can be used as arguments.
The Supreme Court doesn’t have any binding precedents.
Common law is more flexible and faster because it adapts faster to the reality of the moment and can take into account way more details and facts. They can have some 6 avillagrasa IBE, 1st year - 2nd Term codes but they are very minimal. This is because there’s a statement and then it develops according to experience (case law).
BINDING PRECEDENT: it has 2 legal effects - Horizontal stare decises: if I decide something now I will have to the same in the future.
Vertical stare decisis: precedent binging from higher courts to lower ones. This means that all the courts below me would have to solve the cases as I did.
In US there’s a Federal law and State law (which has to follow federal’s law interpretation).
1 Clàusula sòl: Quan demanes una hipoteca no se sap quin interès acabaràs cobrant. Amb aquesta llei garanteixen que, independentment del que passi amb l’euribor, els bancs rebran el mateix. Aquesta llei - ques’ha fet a la European Cour of Justice - s’han de complir a totes les courts d’Espanya.(això és vertical).
ADDITIONAL SOURCES OF LAW IN COMMON LAW SYSTEM: - LEGISLATION: they tend to be shorter, though.
CUSTOM: it depends on how people do things (for example, maybe there’s no need to make a contract or in the case of social norms).
CONVENTIONS: they depend on the area in which we are. Is like a social norm, and it’s only valid for that community.
CHARACTERISTICS: - 1 Mostly unwritten Stare decisis (the parties investigate and there’s a party with strong incentives to avoid the other lying).
The arrows point in which direction the precedents are binding. Trial=judici 7 avillagrasa IBE, 1st year - 2nd Term - Adversarial Role of juries is very important (Lawyers determine the issues of fact and also if the attendant is guilty or not. The judge decides the punishment).
Judicial review (you can ask for another trial).
{“If it doesn’t fit, you must acquit ”, O.J. Simpson’s trial - If there’s not a clear evidence the person is innocent } Dual system: There are domestic laws and international laws. Those international laws will be internalized, transpose (written in the domestic law). This is because the domestic laws don’t say the international law should follow it.
CIVIL LAW There exists a code with all the rules, which are followed by the judge. They say what’s illegal and what’s not and how to proceed. The problem is that in some cases there isn’t any rule so judges don’t know what to do.
In the civil law the powers are separated and rules are strictly followed. Judges only have to take the code and apply it, they are not creative. However, the law can be interpreted differently.
A civil law system has to update its laws to adapt. When it’s changed, the old law can’t be used anymore.
Precedent is not binding, however they can be used as an argument. The evidence is collected by the judge, not the lawyers/jury. After he has collected all the evidence he makes a list of chargers (acusats). This doesn’t mean you’ll go to jail, first you have to go to the trial, where another judge will decide the guiltiness. Trials can have a jury in civil law too, but usually they don’t because they only want professionals. In Spain only some criminal cases have a jury because people judge subjectively.
8 avillagrasa IBE, 1st year - 2nd Term HISTORY There’s a codification, which means that there’s a code and all laws are usually written.
These countries use the Roman law. They had laws for citizens (not for servants) to organize people. For example, your status was inherited (a son of a slave will be a slave too), the same thing happens now in civil law systems and nationality: your parents “give” you your nationality.
Spain’s civil code (Código Civil) was made in 1889. It was made after most countries’ codes because we were fighting. Anyway, this is still our code. A lot of rules (due church and roman tradition) come from the belief that exist a natural law, which is beyond the legislation process, for example the right to live.
PRIMARY SOURCES: they are binding - Enacted law Custom: can’t contradict a law and the custom has to be proved that this custom is recognized in all the community General principles of law: why do we need that law and how it should be applied  for example our civil code says that the law has to be interpreted according to the context of the moment, so when it talks about men we should also include women SECONDARY SOURCES: they are not binding.
We can use precedents, which they can be very useful when there aren’t primary sources or used as arguments.
In Spain there’s a fight for assigning hierarchy and share powers. The general principles and the custom of the Spa nish law are obeyed but there’s a problem inside the system with the federal law. (Problema de Catalunya) Dual system: In this case, since the constitution doesn’t say that the country should follow the international law. Therefore, the domestic law has to be modified. When an international law contradicts domestic law we are not sure what will happen.
9 avillagrasa IBE, 1st year - 2nd Term SOCIALIST LAW It refers to communal things, they understand the individual as a part of the community, so the individual should be beneficial for the community. There’s a lot of enforcement and since they are usually dictatorships, there are a lot of crimes. The only system with this law is China, which combines socialist law with aspects of Confucius’ philosophy. It’s written and precedent is not recognized.
ISLAMIC LAW It’s based in the Koran. The interpretation is based in the Sharil’a (way to interpret the Koran). They consider it to be given by God, so there’re a lot of moral rules. In our system you can be against the law but in this they can’t (you can’t go against God’s word). It’s a hybrid between adversarial and inquisitorial. Precedent is absent. They also don’t use juries.
LEGAL INTERPRETATION Even if we have laws, they can be interpreted in many different ways, so there might be some degree of uncertainty. This is how the rule should be understood: 1. Literal interpretation: Finding the meaning word by word 2. Contextual interpretation: Finding the meaning using other laws of the same topic 3. According to historical and legislative background: See what the authors meant 4. Sociological interpretation: Interpretation adapting it to the social reality of the current situation 5. Teleological interpretation: Depending on the objective of the regulation. It’s the preferred in the courts (efficiency, distribution of wealth...) Also accepted: 6. Logical interpretation: to avoid contradictory or absurd results 7. Interpretation according to the constitutional principles 8. According to US laws 10 avillagrasa IBE, 1st year - 2nd Term Seminar 1: Common and civil law There are social rules and legal ones.
 Social rules: they are internalized works because of culture. However they can be bad because limits our freedom because we don’t consider better alternatives. It’s the cheapest way to make people behave. The legal rule should induce to behave to be efficient (voluntary good behaviour). There’s no need of enforcement.
 Legal rules: a good policy maker would do the norm such that people internalize them so they comply voluntarily. Some legal norms are inspired by social rules because we want to protect our rights and punish people who don’t respect it.
There exist common and civil law:  Common law: the judge doesn’t have to follow the precedents. The followed precedents are from the high court.
The judge sees what another case, which was similar and makes a decision: a) Be in favour: they agree and precede the same b) Are not: don’t agree and justify why The lawyer will bring all the case laws (sentències) that were in favour of the client, but also has to mention the ones against. They also have jurists (jurado popular). The jury decides the facts (if it’s true) and the judge apply the law.
COURTS: - SUPREME COURT: - APPELLATE COURT: Depends on the Supreme Court and binds the 1st instance court.
- FIRST INTANCE COURT: I have to always be the same. If I’m a judge I can’t judge 2 cases differently.
 Civil law: precedents exist, but they are not binding. Rule enforcement and making are separated.
11 avillagrasa IBE, 1st year - 2nd Term Summary Countries have different legal systems. The most frequent are the common and the civil law systems.
DIFFERENCIES CIVIL AND COMMON LAW Sources of law Role of judges Selection of judges Juries2 Characteristics of processes Main approach Role of scholars Formation/way of learning COMMON LAW Case law, precedents They create the law Elected lawyers Very important Adversarial Pragmatism, induction Read case-books to extract general norms Study case-law/casebooks CIVIL LAW Written, codes, statutes They apply the law Career path Only in some cases Inquisitorial Formalism, deduction Make commentaries and doctrines Study the code THE SEMINAR Social rules: Are internalized because of the culture. They are cheap to enforce but people don’t consider better alternatives.
Legal rules: A good policy maker is going to make people internalize this legal norm so it becomes cheap to enforce. They are usually inspired by social rules The hierarchy in US: In civil systems the enforcement (judicial power) and making (legislative power) of rules are separated.
2 People with no idea about the law.
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