Commonwealth Caribbean Business Law

Natalie Persadie, Rajendra Ramlogan

• Publisher: Routledge-Cavendish
• Year: 2015
• ISBN:
  9781317688778
• Edition: 3
• Topic: Jura
• Subtopic: Rechtstheorie & -praxis

Now in its third edition, Commonwealth Caribbean Business Law continues to break away from the traditional English approach of treating business law primarily as the law of contract and agency.

Taking a panoramic view, it explores the foundation of various legal systems before examining areas of legal liability that affect business activities. These include areas such as contract law, tort law, criminal law, agency and internet law which present significant challenges confronting the business sector. The book primarily targets the development of business law principles in several Caribbean Commonwealth jurisdictions but, where appropriate, also embraces the jurisprudence of other Commonwealth nations, such as the United Kingdom, Canada and Australia. It also explores the United States as a non-Commonwealth jurisdiction, given the increasing importance in the Caribbean of judicial pronouncements relating to internet law from this territory.

Using excerpts from key judgments, the book allows students, particularly those with a non-legal background, to understand key legal principles for business as presented by the judiciary and draws parallels between legal theory and business practice.

Chapter 1

Introduction to Legal Systems

Reproduced with the permission of Stu’s Views

The rule of law

Law is a social phenomenon. It has grown into an essential principle of social organisation in Western civilisations as a result of the historicity of those societies.¹ Law functions as the formal machinery for creating and maintaining social order, as seen in the Western world. All societies possess some degree of order which allows for sustained social interaction within a period of time. The form of order which exists depends on the particular society and the perceived needs of that society. Political, historical and moral characteristics of a society also assist in shaping that form of order. According to Sinha, law is a composite of three components: rules of law (mental), attitudes (psychological) and external aspects (behaviour). It is these three components which shape law in any given society; however, the question begs itself, how does law maintain social order? Law prescribes what acceptable social conduct for any given society is and punishes deviant behaviour which results in conflict or disorder. There are established institutions and procedures through which the law operates in civil and criminal issues to return a society to its status quo of social normalcy.

The constitutional and administrative law of the United Kingdom has long respected a number of values, many of which are encapsulated in the concept of the rule of law: checks against arbitrary power; democracy through universal suffrage and regular elections; representative and accountable government; individual freedom; fair procedures; and judicial independence.² The intricately woven interrelationship between government and the law is reflected in the concepts postulated by the rule of law. The notion itself is fluid and lends itself to a wide range of interpretations. Despite the inability to propose a concrete definition for the concept, it is accepted that central to the general idea of the rule of law is the specific proposition that it involves the rule of law as opposed to the rule of people to control the exercise of arbitrary power. It can be said that it is usually intended to imply that the powers exercised by politicians and officials must be based on authority conferred by law and that the law should conform to certain minimum standards of justice, both procedural and substantive.³ This is why the actions and decisions of those whose authority is conferred by law can be subject to judicial review proceedings. Politicians and government officials should, therefore, ordinarily be minded not to abuse the discretionary powers associated with the office that they hold.

The concept of the rule of law versus the rule of people is most significantly reflected in the stated role of judges. Their position is such that they are expected to deliver completely impartial judgments through a strict application (and sometimes interpretation) of the law without fear or favour; neither are they expected to allow personal preferences or beliefs to influence decisions taken.

Legal philosophers on the topic of the rule of law abound. At this juncture, three shall be highlighted: AV Dicey, EP Thompson and Joseph Raz.⁴

Dicey was a theorist on the right of the political spectrum and was of the view that the rule of law constituted a key distinguishing feature of the English constitution, where this was absent in the constitutions of continental Europe. For Dicey, there were three elements which comprised the rule of law:

• An absence of arbitrary power exercised by the state. The discretionary powers exercised by the state were subject to the boundaries set by laws which sought to control the abuse of such powers.
• Equality before the law. No one was above the law, regardless of social class or rank.
• Supremacy of ordinary law. This is based on the fact that the English constitution was the result of the ordinary law of the land and based on the provision of remedies by the court as opposed to a declaration of rights in the form of a written constitution.

Dicey wrote from a historico-political period where the maintenance of individual property and individual freedom to use that property was vital. Following from this, he believed that everyone should be treated as possessors of abstract rights and duties in the eyes of the law and the state, despite their wealth or power.

EP Thompson, a Marxist historian on the left of the political spectrum, saw the rule of law as protection against, as well as being under attack from, the encroaching power of the modern state. Thompson believed that the state used its control over the legislative process in order to undermine civil liberties in the pursuit of what it considered to be the public interest. He argued that the core meaning of the rule of law is not simply procedural propriety but also the manner and extent to which it limits the exercise of state power.

Joseph Raz suggested that the pursuit of social goals practically required the enactment of general laws as well as particular laws. This goes against the German notion of Rechtsstaat where the state is subordinate to the law and, as such, is required only to institute general laws and cannot make laws aimed at particular people. According to Raz, the wider idea of the rule of law emerges from the requirement that the law must be capable of guiding the individual’s behaviour. From this general idea, the most important principles for Raz are as follows:

• Laws should be prospective rather than retroactive. People cannot be guided by or expected to obey laws which have not as yet been introduced. Laws should also be open and clear to enable people to understand them and guide their actions in line with them.
• Laws should be stable and should not be changed too frequently, as this might lead to confusion as to what was actually covered by the law.
• There should be clear rules and procedures for making law.
• The independence of the judiciary has to be guaranteed to ensure that it is free to decide cases in line with the law and not in response to any external pressure.
• The principles of natural justice should be observed, requiring an open and fair hearing to be given to all parties to proceedings.
• The courts should have the power to review the way in which the other principles are implemented to ensure that they are being operated as demanded by the rule of law.
• The courts should be easily accessible as they remain at the heart of the idea of making discretion subject to legal control.
• The discretion of the crime-preventing agencies should not be allowed to pervert the law.⁵

Legal traditions or families

Textbooks on legal traditions generally cite the existence of three highly influential legal traditions: civil law, common law and socialist law. Such traditions are not necessarily mutually exclusive. They are of particular interest as they came from some of the most powerful and technologically advanced nations of the world and have been adopted, to a greater or lesser extent, in other regions of the world. From these varying types, legal systems evolved, which include religious law, customary law and mixed law systems.

It is necessary to differentiate between the term ‘legal tradition’ and ‘legal system’. While these terms are sometimes used interchangeably, they are most certainly not synonymous. A legal tradition refers to a set of deeply rooted, historically conditioned attitudes about the nature of law; the role that law plays in society; the proper organisation and operation of a legal system; and the way that law is or should be made, applied, studied and taught. The style of a legal tradition is influenced by factors such as its historical development and background; predominant and characteristic mode of thought in legal matters, especially distinctive institutions; acknowledged legal sources; and ideological epistemologies. The legal tradition puts the legal system into cultural perspective.⁶ According to Merryman, a legal system is an operating set of legal institutions, procedures and rules borne of a legal tradition. As an example, there are many nations which share the commonality of civil law tradition, such as France, Germany, Italy, Switzerland, Argentina, Brazil and Chile, but there exist great differences in each respective operating legal system as they each have quite different legal rules, legal procedures and legal institutions.

Civil law

The civil law tradition is characterised by a particular interaction in its early formative period among Roman law, Germanic and local customs, canon law, the international law merchant and, later on, by a distinctive response to the break with feudalism and the rise of nation states.⁷ It is the oldest and most widely distributed of all legal traditions and is said to date back to 450 bc. It remains as the dominant legal tradition in most of Western Europe, all of Central and South America, many parts of Asia and Africa and can even be found in a few enclaves in countries practising common law, such as in Louisiana (USA), Québec (Canada), the Philippines and Puerto Rico. Civil law was the dominant legal tradition of countries which practise socialist law and continues to exercise great influence on socialist legal systems.

A common misconception is that codification is peculiar to civil law. The state of California has more codes than a civil law nation, but it is not a civil law jurisdiction.⁸ What distinguishes the system found in California from the concept of codification in civil law nations is the underlying ideology. The notion of what a code is and the functions it should perform in the legal process make the ideology of codification in the civil law world entirely different to that which obtains in California.

The Scandinavian countries introduced codification in the seventeenth and eighteenth centuries; however, it was the French Civil Code of 1804 and, to a much lesser extent due to its highly technical and scientific nature, the German Civil Code of 1896, which have served as models for most other modern civil codes. One of the main features of codification was the emphasis on the separation of powers (see ‘Subjects of law in common law jurisdictions’ below). It advocated the need for disparate functions of the judiciary and the legislature, as legislative skills and judicial skills are indeed distinct. Judges are, therefore, only expected to apply and interpret laws through wise and reasoned application and not to make laws themselves, while legislators are expected to discover the principles in each area which are most conducive to the common good. The code, a codified body of general abstract principles, must, of necessity, be complete, coherent, unambiguous and clear, so that judges would not be in a position where they might need to exercise their discretion in any given matter, thereby making law.

Some civil law political entities have hybrid legal traditions which have survived in uncodified form but have, to varying degrees, retained an adequate number of elements of Roman law in written form to permit their inclusion in the civil law tradition. Such is the case of Scotland and South Africa where the hybrid involves common law in the former and common law and Dutch law in the latter. Other political entities less influenced by Roman law, whether codified or not, founded on a perception of the role of statute law, are considered to be of a ‘pure’ civilian tradition, such as the Nordic legal tradition.

Common law

Common law was born at the end of the Norman Conquest in 1066 ad. The identifying character of this tradition, unlike civil law where, typically, principles and ideas are formally recorded, is its reliance on precedents and judge-made law. Judicial discretion finds expression in common law countries where new law emerges frequently to deal with changing times and needs. It is devoted to the careful and realistic discussion of live problems and makes it quicker to deal with matters in concrete and historical terms, rather than having to think systematically or in the abstract, or to analyse problems and fit them into the existing system, as is required in civil law.⁹

Like civil law, common law has taken on a variety of cultural forms worldwide, due in large part to colonialism and the imposition of the legal tradition on member countries of the British Empire. These include Australia, Canada, New Zealand, Fiji, India, Hong Kong, the United States, some West African countries and most of the English-speaking Caribbean. Common and civil law exist in geo-politically contiguous zones, such as Québec in Canada and, to a lesser degree, Louisiana in the Southern United States. It also exists as a more complex common-civil law hybrid, as typified in the unique case of South Africa.

Common law countries include political units whose law is, in the main, based on English common law concepts and legal organisational methods which place great emphasis on case law, as opposed to statutory law, as the general means of expressing general law. Countries that do not necessarily have close ties to the English tradition and possess an abundance of codes, legislation and non-jurisprudential normative instruments may maintain common law jurisprudence as their basic law, as seen i...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Table of cases
• Acknowledgements
• Country name abbreviations
• 1 Introduction to Legal Systems
• 2 Law of Obligations: Making the Contract
• 3 Law of Obligations: Attacking the Contract
• 4 Law of Obligations: Torts
• 5 Criminalising Business Activities
• 6 The Law of Agency
• 7 Internet Law and Business
• Bibliography
• Index