Law for Non-Law Students

Keith Owens

• Publisher: Routledge-Cavendish
• Year: 2013
• ISBN:
  9781135338671
• Edition: 1
• Topic: Jura
• Subtopic: Rechtstheorie & -praxis

Law for Non-Law Students is written in a clear and readable style and aims to make the law understandable for readers at undergraduate or comparable level. It explains the practical influences under which the law has been formed, so that the student will be better able to understand why the law has developed in the way that it has.

It gives lots of straightforward examples as to how the law works in practice and aims to equip students with the ability to appraise the effectiveness of the law in a particular circumstance rather than simply providing a list of rules for the student to regurgitate at exam time. The facts of the more important cases are given in some detail to enable the student to appreciate the range of factors which the court may have taken into account in reaching its decision.

The new edition has been updated to take account of all recent developments, both in relation to statute and to case law. Certain chapters, particularly in the area of sale of goods, have been substantially rewritten and expanded in an attempt to give more detail, while at the same time remaining student-friendly. New chapters on Agency and Negligence have been added. brThis new edition should be suitable for most courses which have a law element.

CHAPTER 1
THE LEGAL SYSTEM

INTRODUCTION

This book begins by looking at the legal system. It is not intended to give a comprehensive view: there are specialist texts which will do that. It is intended to tell you enough about the system so that you know how it works in relation to business matters.

It is difficult to undertake any activity in business which does not have a legal consequence. Any sale of goods or supply of services, for example, has potential legal complications. However, this does not mean that business people need to consult their solicitors before their every move. Disputes tend to be resolved by negotiation and compromise. Only in extreme cases is recourse taken to legal action. This is because legal action is not only expensive in relation to the costs that need to be paid to the justice system (not least to one’s professional legal advisers), but it is also expensive in relation to the working time lost to the business enterprise because key personnel are needed to prepare statements, consult with legal advisers and, ultimately, to attend court for possibly several days to give evidence. Although the greater part of the costs paid to the justice system may be reclaimed from your opponent if you win, winning is never guaranteed; and even if you do win, the cost of tying-up your enterprise’s personnel cannot be reclaimed.

It is common when concluding a contract to put a clause in it to the effect that any disputes shall be referred to arbitration. This means that the dispute will be solved by an arbitrator (a sort of referee—further reference will be made to arbitrators later on). In this case, the need to attend court is replaced by the need to give evidence to the arbitrator, who may be prepared to be more accommodating than the courts to the needs of your business: for example, evidence may be given by written statement or may be given outside normal business hours. Nevertheless, a significant amount of time will still be taken up.

In practice, wherever possible, business people avoid recourse to the legal system and rely on self-help. Why, then, is it necessary for a business person to learn the law at all? Can’t all disputes be solved by common sense and compromise? The answer is that, to some extent, this is what happens. But common sense solutions usually involve negotiations. For example, your customer wishes to reject a freezer she has bought from you because, although it performs its function perfectly well, it had some cosmetic damage which, to put right, will cost between 15% and 25% of the purchase price. You offer a discount of 15%. She argues for 25%. In the end you agree on 20%.

Negotiations can be pursued much more effectively if you, as a negotiator, are aware of the legal principles that a court would follow if it were to decide your dispute. It enables you to quantify, in percentage terms, your chances of winning should the matter have to be resolved by a court or arbitrator. For example, has your customer the legal right to reject the freezer because of cosmetic rather than functional damage? Under s 14 of the Sale of Goods Act 1979, it is probable that, especially if she is a consumer, she does have that right. Her chances of winning the case, should she seek to reject the goods and you refuse to accept this rejection, are high, let us say in the region of 95%. You will, therefore, bear that in mind when conducting your negotiations and, having succeeded in persuading your customer to accept the goods for a reduction of 20% of the price, you will probably be quite satisfied with your efforts.

COMMON LAW AND CIVIL LAW

This section deals with the relationship between common law and civil law. Until relatively recently, this was largely of academic interest. However, since European Union law is based on civil law and since the English courts must now take account of Union law, where appropriate, in reaching their decisions, the relationship between the two has become of practical importance.

There are two important systems of law which have been developed in the Western world. These are:

1. Roman law; and
2. English law.

Many other states throughout the world have based their legal systems on one of these two systems. Countries which have based their system on Roman law, including the EU, are said to have a ‘civil law’ system. Countries which have based their system on English law are said to have a ‘common law’ system.

Common law systems

English law (‘English’ includes Welsh, but excludes Scottish and Northern Irish) is called common law. This means that the law is common to the whole country, in contrast to law which does not apply throughout the whole country but which varies according to local custom. Common law originally consisted mainly of principles established by judges in cases brought before them, which the judges then applied to similar cases arising in the future. Such law is called case law. However, nowadays, legislation enacted by Parliament (also called statute law), which mainly takes the form of Acts of Parliament and statutory instruments, has become the most important source of domestic law, though, for example, most of the law of contract is still based on case law rather than statutory law. The term ‘domestic law’ is used to denote areas of law which are not affected by European Union law. Where an area of law is affected by European Union law, the legislation of the European Union is the supreme source of law.

Those countries which have a legal system based on English law and, therefore, have common law systems, include many former British colonies, for example, Australia, New Zealand, the USA (except Louisiana) and Canada (except Quebec). They also include Northern Ireland. The significance of this is that if there is no English authority on a particular point of law, the judge may seek guidance from the law of other common law countries.

Example

In Ready Mixed Concrete v Ministry of Pensions (1968), the court had to decide whether lorry drivers who delivered concrete for Ready Mixed Concrete Ltd were employees of the company, or whether they were self-employed contractors. The issue was complicated by the fact that, although the drivers were designated ‘self-employed’, there were a large number of factors (for example, they were compelled to wear the company’s uniform and provide sick certificates when they were incapable of work through illness, among other things), which pointed towards the conclusion that they were, in law, employees. Because there had been no analogous English case, the court referred to a USA case and a Canadian case to help in establishing criteria which would act as a guide to whether, in such cases, the workers are truly self-employed or whether, in reality, they are employees.

Civil law systems

Most of the countries of Western Europe, their colonies and former colonies have a ‘civil law’ system. Scotland, through its ancient alliances with France and the Netherlands, has a civil law system. The Scots complain, with some justification, that their system has become adulterated by virtue of the many parliamentary enactments which apply indiscriminately throughout the UK. In addition, because certain principles of Scottish law are identical to those of English law, each country has borrowed quite liberally from the law of the other. For example, the seminal case in English law on establishing liability for negligence is a Scottish case. Nowadays, the principal differences relate to the law of contract and tort (civil wrongs, which in Scotland are called ‘delict’) and to criminal law. On the other hand, in respect of many areas of statutorily created modern law (employment law relating to unfair dismissal, equal pay, etc), Scottish law is identical to English law.

Differences between civil law and common law

European Union law is a civil law system. The civil law has a fundamentally different approach to both the creation and interpretation of statute law to that adopted by English law. This means that, if they are to apply European Union law (which now takes precedence over any conflicting domestic law in the UK), many UK courts are having to familiarise themselves with a system that is essentially alien to them.

Civil law creates statutory law (usually called ‘codes’) by laying down a series of broad principles, leaving the judges to interpret what they mean. In this they may seek assistance from previously decided cases involving similar issues and from the opinions of eminent textbook writers. In contrast, UK statutes are much more detailed, attempting to cover all foreseeable eventualities. Of course, not every eventuality is foreseen, so that judges in UK law also have an interpretive role, which involves reference to previous cases and other sources of help, including textbook writers. However, we should not make too much of this supposed distinction, since regulations and directives, some of which are very detailed, have been issued in order to amplify the Treaty of Rome and other primary legislation of the European Union.

In relation to interpretation of statutes, the English method is to look at the literal meaning of the words used and to give effect to them. It is immaterial if the literal meaning results in a different consequence to what was intended, providing the result is not manifestly absurd or meaningless. If that is the case, the literal meaning can be modified, but only in so far as it is necessary to make sense of the provision.

Example of the literal approach to statutory interpretation

Fisher v Bell (1961)

The Restriction of Offensive Weapons Act 1959 provided that it is an offence to ‘offer for sale’ a number of offensive weapons, including flick-knives. A shop-keeper displayed a number of flick-knives in his shop window, with price tags attached. Was he guilty of an offence? Although the purpose of the Act was clearly to penalise those who sought to supply dangerous weapons to the public, it was held that no offence had been committed because it is an established part of contract law that goods with prices attached are not being offered for sale. Therefore, applying the literal approach, there had not been an offer for sale.

The civil law method, on the other hand, is to look at the purpose of the provision and to interpret the words used in such a way as to give effect to that purpose. This is often called the ‘purposive’ approach. The tension between the literal approach (which is still used in purely domestic legislation) and the purposive approach (which should be used when interpreting a statute passed in pursuance of our obligations under the European Treaties) is causing some problems in the English courts.

Example of the difference in the interpretation of statutory law

The Transfer of Undertakings Regulations 1981 were passed in order to give effect to EEC Directive 77/187. This is aimed at protecting the employment of persons who are employed in a business which is transferred to another business. The Regulations provide that the contract of employment of those persons employed by the transferring business immediately before the transfer, shall transfer to the new owner. The question has arisen as to what immediately before means, since buyers who wish to avoid the burden of having the seller’s employees transferred with the business have induced the seller to dismiss the employees shortly before the transfer is due to take place. The legal effectiveness of this was underpinned by a 1986 Court of Appeal decision in which the words immediately before were given their literal meaning, and it was held that employees dismissed three hours before the transfer took place were not employed immediately before the transfer. However, in the later case of Litster v Forth Dry Dock and Engineering Co Ltd (1989), the House of Lords adopted the purposive approach and held that the words immediately before the transfer must be interpreted in a manner which enables the regulations effectively to fulfil the purpose for which they were made, that is, that of giving effect to EEC Directive 77/187, which was issued with the aim of protecting employment.

Different meanings of ‘civil law’ and ‘common law’

It is important to be aware that the expressions ‘civil law’ and ‘common law’ can mean radically different things according to the context in which they are being used.

‘Civil law’ may be used with one of three meanings:

1. it may mean that part of a country’s law which is not criminal law (in fact, that is the context in which most laymen will find it being used);
2. it may mean, as we have used it above, a system of law based on Roman law; and
3. to a person in the armed services it may mean any law which is applicable to civilians (that is, law which is not military law).

‘Common law’ may also be used with one of three meanings:

1. it may mean the whole system of English law, both case law and statute law, which is the sense in which we used it above;
2. it may mean law which was developed by the judges in the early common law courts, in contrast to the law which was developed by successive Chancellors in their own court (called the Court of Chancery), in order to mitigate the rigour and inflexibility of the common law. Such law is called ‘equity’. Where equity and common law conflict, equity prevails; and
3. it may be used to mean that part of the law (both common law and equity), which remains case law rather than statute law.

It is important when you are reading about the law, to identify which of the possible meanings the author is giving to either of these two expressions.

The relationship between equity and common law

We have said that the term ‘common law’ may be used to distinguish the law which was applied in the old common law courts from the ‘equity’ applied in the Chancellor’s court, the Court of Chancery. The common law courts and the Court of Chancery were incorporated into the new High Court of Justice, as Divisions of that court, as a result of the Judicature Acts 1873–75. The administration of the rules of common law and equity was fused at the same time. However, it is still important to know whether a right or remedy derives from common law or from equity. We will examine the reasons why after we have looked at the development of equity.

Equity came about because of the rigid and inflexible approach of the common law judges in a number of situations. For example, in medieval times, if Alan borrowed £50 from Bill, Alan might be required to sign a document called a ‘bond’ in which he agreed to repay the loan. Suppose he repaid the loan, but failed to have the bond cancelled. Bill then claims repayment of the loan, relying on the bond as evidence that the money was owed. The common law courts would refuse to look beyond the evidence of the bond and Alan would have to repay the loan a second time.

If the common law judges had been willing to adapt the law in situations where a rigid application of the common law led to injustice, there would have been no need for equity. However, the judges tended to be intransigent, with the result that, in the early days of the law, where a litigant failed to get justice from the courts of common law he might petition the King to do justice. The King would pass such petitions to his Chancellor, who was an ecclesiastic and was, in effect, the King’s chief minister. The Chancellor, being a churchman, would decide the matter according to what he thought that a person of good conscience should do in the circumstances.

Petitions grew in number to the point where a special court, the Court of Chancery, had to be established in order to deal with them. A prime example can be found in the law relating to mortgages.

Example of equity in relation to mortgages

A mortgage consists of putting up property as security for a loan. Suppose Ann wished to borrow £10,000 from Ben against the security of land called Greenacre, worth £30,000. At common law, she would convey Greenacre to Ben (that is, make Ben the legal owner of Greenacre), subject to a contractual agreement that Ben would reconvey Greenacre to her if she repaid the loan of £10,000 on time. If she failed to do so, Ben remained the owner of Greenacre and, moreover, Ann still owed the £10,000. Against such a palpably unjust state of affairs, the Chancellor intervened. Equity would allow Ann an additional period of time in which to redeem the mortgage (that is, pay off the loan) and, failing that, the court would order that the property should be sold, that Ben should recoup his loan out of the proceed,s and that Ann should receive any balance left over. Such a balance is called the ‘equity of redemption’.

The law relating to mortgages was not the only area of law in which equity intervened in order to apply ideas of fairness. The common law was defective in relation to remedies. The only remedy available to a claimant at common law consisted of a money payment called damages. However, there are numerous situations where damages are not an adequate remedy. For example, suppose that Carol continuously trespassed on David’s land. For David to have to keep going to court to claim damages would be unduly burdensome. Equity, therefore, invented the remedy of the injunction: an order to Carol to desist from trespassing on David’s land, which, if she disobeyed, amounted to contempt of court, for which she could be punished.

The classic example of the intervention of equity is in relation to the law of trusts. A trust occurs where one party, D (the donor) gives property to T (the trustee) to hold or administer on behalf of B (the beneficiary). A common modern example is where a husband with a wife and, say, two children, wishes his children to become the ultimate owners of his estate after his death, but, should his wife survive him, wishes his wife to enjoy the income from the estate during her lifetime. The husband does not wish to make his widow the owner of the estate in case she should remarry and take the property out of the family, thus depriving his children of the property. The solution is to create a trust by which the husb...