Mixed jurisdictions : common law vs civil law (codified and uncodified)
(Part II) by William Tetley, Q.C.* Professor of Law, McGill University, Montreal (Canada); Distinguished Visiting Professor of Maritime and Commercial Law, Tulane University (United States of America); Counsel to Langlois Gaudreau O'Connor of Montreal.
http://www.unidroit.org/english/publications/review/articles/1999-4a.htm VI. - CIVIL LAW AND COMMON LAW : RESULTING DIFFERENCES IN LAW A study of several differences in substantive law as between the civil law and the common law is very instructive in illustrating the diversity of basic juridical concepts underlying the two legal systems. 1. Economic loss Civil law's unitary system of obligations provides for the same means of enforcement (moyens de mise en oeuvre) whatever the obligation (patrimonial or not, contractual or not), including performance by equivalence (exécution par équivalent), i.e. damages (dommages-intérêts), which include losses of profits (pertes de profit or lucrum cessans in Latin).144 Common law, while allowing consequential damages in contract, used to be unwilling to award pure economic loss (i.e. damages in tort when there is no physical damage).145 This attitude has been softened recently, however.146 2. Pre-judgment interests Pre-judgment interests are recoverable as of right in civil law,147 because they are understood as part of the lucrum cessans. On the contrary, pre-judgment interest has been awarded only in relatively recent times in common law systems, except in maritime law. 3. Lex mercatoria The modern lex mercatoria finds its strength in civilian jurisdictions, as was pointed out by Thomas CARBONNEAU:
"It is not surprising that the strongest advocates of the new law merchant are from civil law jurisdictions where general legal principles constitute the primary source of law and specialized courts have long handled commercial disputes at an intermediary level of the legal system. Nor is it astonishing that the most virulent critics of lex mercatoria and delocalization are steeped in the common law tradition of narrow rules and holdings, where decisional law is the foremost source of law and courts are its oracles." 148
4. Conflict of laws149 Terminology - In common law, "conflict of laws" includes choice of law, choice of jurisdiction and recognition of foreign judgments. In civil law, the appropriate translation is "private international law" (as opposed to internal law) because conflict of laws (read literally) merely governs choice of law rules. History - While private international law dates back to Roman times, common law conflict of laws rules are relatively new, because the procedural requirement of service used to be sufficient to limit the jurisdiction of the court to domestic conflicts. Emphasis - Civil law, being essentially substantive instead of adjectival, puts more emphasis on its choice of law rules, while common law, being essentially procedural, focuses on the rules of jurisdiction (for example, service ex juris). Traditional method - The civil law traditional method (imported into many common law systems) consists in characterising the dispute as belonging to a defined category, and then identifying the applicable internal law in relation to points of attachment of the category concerned. Even with similar categories (e.g. procedural versus substantive issues), the characterisation of issues is always influenced (if not mandatorily governed) by the lex fori; hence a delay to sue issue would be characterised as substantive in civil law (relating to prescription)150 and procedural in common law (relating to limitation periods).151 The same is true of maritime liens, which are procedures in England,152 and substantive rights in civil law,153 as in certain common law jurisdictions. 154 Special methods - Civil law and common law developed similar rules to limit the scope of the traditional method when its strict application led to undesirable results. The civil law notions of fraude à la loi and fraude au jugement155 are similar to the common law rule of "no evasion of the law";156 the same is true of civil law's international public order157 and common law's public policy.158 The civil law concept of loi d'application immédiate (mandatory rules) is also making its way outside the civil law jurisdictions - see the reservation at Article 7(1) of the 1980 Rome Convention.159 5. Forum non conveniens 160 Forum non conveniens is the common law principle whereby a court, which has jurisdiction to hear a claim, refuses to do so, because it believes another court of another State also has jurisdiction to hear the claim and can better render justice in the circumstances.161 This principle was unknown to civil law courts, which are often required by the constitutions of their respective countries to hear an action, although they may suspend it. Scotland was first to develop the concept of forum non conveniens 162 and now Québec163 and Louisiana164 have adopted the principle. Lord GOFF of CHIEVELY of the House of Lords suggests that:
[t]he principle [forum non conveniens] is now so widespread that it may come to be accepted throughout the common law world; indeed since it is founded upon the exercise of self restraint by independent jurisdictions, it can be regarded as one of the most civilised of legal principles. Whether it will become acceptable in civil law jurisdictions remains however to be seen.165
Forum non conveniens was accepted by English courts 166 in order to palliate the absence of rules of international jurisdiction (the only procedural rule limiting jurisdiction then being service). 6. Forum conveniens 167 Forum conveniens is the common law principle whereby a court, which does not have jurisdiction over a claim, nevertheless accepts jurisdiction, because there is no other appropriate jurisdiction to hear the claim and justice would not otherwise be done. The principle is not known in civil law, although it has been placed in the new Québec Civil Code 1994 at Article 3136.168 7. Arbitration169 A common law equity clause in an arbitration agreement "purports expressly to dispense the arbitrator from applying the law either wholly or in part."170 In civil law, these are called amiable compositeur clauses. While strict equity clauses (also known as ex aequo et bono clauses) are suspect in England,171 amiable compositeur clauses are generally permitted in civil law jurisdictions and are found in civilian codes.172 8. Interpretation / construction of contracts 173 The common law objective contract theory dictates that contractual promises be interpreted according to the reasonable expectation of the promisee (an objective standard).174 Civil law, which is based on the autonomy of free will, requires actual consent (a subjective standard),175 but presumptions of fact are available to the trial judge. VII. - SOME CIVILIAN PRINCIPLES NOW IN THE COMMON LAW 1. Restitution Restitution is the new common law science which in recent years has spawned textbooks, law journals and law articles, lectures and conferences where none had existed before. Restitution is proof that the common law is not dead. Much of the modern law of restitution resembles the civil law principles of quasi-contract found for centuries in Scottish civil law. The revival or creation of restitution in England intrigues civilians, particularly in codal countries. Terminology - While the principle of unjust enrichment now unites restitutionary claims at common law,176 unjust enrichment at civil law is but one of the quasi-contracts (others being negotiorum gestio and reception of what is not due) which triggers restitution. The common law used to be restricted to specific forms of action which did not include a general restitutionary claim for unjust enrichment. The law of restitution therefore developed mainly through the action indebitatus assumpsit under the implied contract theory.177 The latter concept was abandoned with the abolishment of the forms of actions, and has recently been replaced by a substantive principle of unjust enrichment which underlies, according to GOFF & JONES,178 not only quasi-contractual claims (as in the civil law) but also the other related causes of action which trigger a restitutionary claim. It is interesting that today the three basic requirements of unjustified enrichment under both civil law and common law are (1) an enrichment by the receipt of a benefit, (2) that this benefit be gained at the plaintiff's expense, and (3) a lack of legal cause. 2. Negligence - delict - general tort of negligence Before Donohue v Stevenson,179 there was no general duty of care at common law. There were many tort causes of actions, and the tort of negligence covered only certain special duties. Civil law, on the contrary, always recognised the general obligation not to act unreasonably in situations not governed by contract. Donohue v Stevenson created, amongst the special duties of care already sanctioned by the action in negligence, a general duty of care similar to that of civil law: "you must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour," 180 neighbours being "persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question." 181 Since then, "obligations" have been taught in common law schools and books are written on the subject (e.g. TETTENBORN). 3. Foreseeable contractual damages 182 In civil law, it is not sufficient that contractual damages be the immediate and direct consequence of the non-performance; they must have been foreseen or foreseeable at the time that the obligation was contracted unless there is intentional or gross fault.183 In 1854, Hadley v Baxendale,184 citing POTHIER, the French authority,185 the court adopted the rule that, besides those damages arising naturally from the breach, consequential damages include such damage as "may reasonably supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it;"186 if there are special circumstances, they must be communicated and thus known to both parties. 4. Pre-judgment interests187 In civil law, the general principle of restitutio in integrum entails that pre-judgment interests be granted as a loss of profit.188 Interest is even payable as of right when the debtor has delayed in performing an obligation to pay a sum of money, and are calculated from the date the obligation was due.189 It is not surprising that "damages" is translated into "dommages-intérêts" in French. Pre-judgment interests were gradually awarded in common law. Lord Tenterden's Act190 opened the door slightly in 1833 - the Court was granted discretion to award interest for debts of sums of money. The Law Reform (Miscellaneous Provisions) Act 1937,191 at Section 3, later Section 35A of the Supreme Court Act 1981,192 finally confirmed the discretionary powers of the courts to award interest "at such rate as it thinks fit or as rules may provide". (The Admiralty Court had already adopted the civil law rule that interest was always due to the obligee when payment was not made in time.) 193 5. Proof of foreign law 194 Common law is more adversarial, while civil law is more inquisitorial, when it comes to proving the substance of a foreign law, a question of fact arising in a choice of law or recognition of foreign law situation. At common law, foreign law was proven by the testimony of qualified expert witnesses, who were summoned to court, and subject to examination as to both their qualifications as experts and their knowledge and interpretation of the foreign law in question. In civil law jurisdictions, on the other hand, foreign laws needed usually to be proven only by the production of a certificate, prepared by a diplomat of the relevant State or an expert in the foreign law concerned, who, however, was not called to testify as a witness at trial. Moreover, judicial notice was possible and is now compulsory.195 Today, the United Kingdom has softened its rules of proof of foreign law. Pursuant to Section 4(1) of the Civil Evidence Act 1972,196 any person suitably qualified by virtue of his knowledge or experience is a competent expert, "irrespective of whether he has acted or is entitled to act as a legal practitioner" in the country concerned (what was required before), and uncontradicted evidence of the expert witness as to the effect of the sources he has referred to is usually accepted. Moreover, the Contracts (Applicable Law) Act 1990 197 implementing the 1980 Rome Convention 198 now permits judicial notice in ascertaining contractual obligations. Other common law jurisdictions such as Canada and the United States of America have taken an even more civilian route in adopting less formalistic means of proof and permitting judicial notice as a general rule. 6. Contributory negligence 199 While at common law contributory negligence has always been a complete bar to an action in tort, civil law has always dealt with this issue as a mere question of causation, thereby apportioning liability according to the gravity of the concurrent faults. Moreover, the common law developed the "last opportunity rule" (known as the "the last clear chance rule" in the U.S.) in order to avoid triggering the contributory negligence rule against an otherwise faulty claimant. By way of statute, most common law jurisdictions have now limited, if not abolished, the contributory negligence rule, and adopted the more equitable "proportionate fault" (comparative fault) rule.200 The Supreme Court of Canada even took the matter of reform in its own hands and eliminated the contributory negligence bar in respect of torts aboard a single ship under Canadian maritime law.201 As to the "last opportunity rule", it was held to be incompatible with the new proportionate fault system and hence fell obsolete.202 7. Marine insurance 203 Common law and civil law define marine insurance in different terms. Common law speaks of an undertaking to indemnify "marine losses, that is to say, the losses incident to marine adventure".204 Civil law is concerned instead with the guarantee of "risks in respect of a maritime operation".205 Despite this different wording, however, common law marine policies cover risk interests as well as property rights. VIII. - THE LEX MERCATORIA 1. The influence of the lex mercatoria In medieval Europe, beginning as early as the ninth century and continuing up until the sixteenth century, there existed a remarkably uniform body of customary mercantile law which was applied by merchant courts in commercial disputes. This transnational custom was known as the lex mercatoria, or in English, the "Law Merchant".206 The lex mercatoria incorporated a body of customary private maritime law, the lex maritima, or "Ley Maryne" as it was called in Law French. The two were interrelated because of the importance of seafaring commerce in medieval Europe. The relationship was colourfully described as follows by MALYNES writing in 1622: 207
"And even as the roundness of the globe of the world is composed of the earth and waters; so the body of the Lex Mercatoria is made and framed of the Merchants Customs and the Sea Laws, which are involved together as the seas and the earth."
Over time, various principles of the lex maritima were committed to writing in primitive codifications, of which the three most important were the Rôles of Oléron (c. 1190),208 which applied in northern and western Europe from the Atlantic coast of Spain to Scandinavia; the Consolato del Mare,209 which governed Mediterranean maritime affairs from about the late 1300s; and later the Laws of Wisbuy (or Visby),210 based on the Rôles of Oléron, which regulated trade on the Baltic.211 The lex mercatoria and its maritime component, the lex maritima, were administered by local courts, often by the "piepowder" (piedpoudre) courts at medieval fairs, which typically heard the disputes between the merchants concerned and rendered judgments between tides, so as not to delay the merchants unduly on their voyages. 212 The Law Merchant, including maritime law, thus constituted a legal system, with rules and institutions of its own, which relied upon codified principles in the civilian manner, and which was burdened with little conflict of laws because of its Europe-wide character. Even in England, it was this transnational, essentially civilian ius commune which governed commercial and maritime litigation conducted before the High Court of Admiralty sitting at Doctors' Commons in London.213 Scotland too accepted the lex maritima. In Nicolsoun v Watsoun, a decision of Scotland's Admiralty Court, it is reported that there was pleaded "the law of the buik of Olouris safer as thai ar ressavit in this realme" (the law of the book of Oléron so far as they are received in this realm).214 A surprising amount of this historic, civilian maritime ius commune continues to exist in the admiralty law of modern nations, including common law countries, and particularly in the United States. Many principles, such as abandonment in shipowners' limitation of liability, proportionate fault in marine collisions, wrongful death remedies for the survivors of deceased seafarers, maintenance and cure rights of sick and injured seamen, the awarding of prejudgment interest as an integral part of damages from the date of the casualty, the civilian assistance principle in modern salvage law, marine insurance and the application of equity, are among the examples in substantive law. Procedural law also reflects the same heritage in the maritime attachment, an admiralty application of the saisie conservatoire of traditional civil law. But in addition there is what has been called the "new" Law Merchant, the modern lex mercatoria, which many scholars believe is gradually beginning to take shape in international commerce. The 1993 Uniform Customs and Practice for Documentary Credits (UCP 500)215 published by the International Chamber of Commerce is one example, being a compilation of modern banking practices which enjoy near universal acceptance and "... will readily be treated by the court as impliedly incorporated into the various documentary credit contracts as established usage." 216 The 1990 Incoterms of the International Chamber of Commerce also provide a transnational set of conditions on price and delivery applied uniformly in international sale of goods contracts. Another significant development is the 1980 Vienna Sales Convention217 which "seeks to maintain a delicate balance between the contrasting attitudes and concepts of the civil law and of the common law ..." 218 in harmonizing law on the sale of goods between States party to the Convention. It is noteworthy that the Convention has been applied as part of the modern lex mercatoria by the Iran-United States Claims Tribunal.219 In shipping, the influence of the contemporary Law Merchant may be seen in the use by shippers and shipowners and their respective agents of a multitude of standard-form contracts, particularly standard-form bills of lading 220 and charterparties,221 as well as in certain normative documents frequently incorporated by reference into carriage of goods by sea contracts.222 One of the areas in which growth of a modern lex mercatoria is most visible is in international commercial arbitration. With each passing year, there is an ever-increasing volume of reported arbitral awards (particularly in civil law jurisdictions, as well as in the United States), and arbitrators are tending more and more to refer to previous awards rendered in similar cases, thus gradually developing a system of arbitral precedent.223 International commercial arbitration is also greatly aided by major international Conventions such as the New York Convention 1958 224 and the 1985 UNCITRAL Model Law on International Commercial Arbitration.225 The latter instrument offers a complete legislative cadre for international commercial arbitration, including both substantive and procedural rules.226 Legislation based on the Model Law is now in force in such widely divergent jurisdictions as Australia, Bulgaria, Canada (at the federal level and in all provinces and territories), Cyprus, Hong Kong, Nigeria, Peru, Scotland 227 and Tunisia, as well as in several U.S. states.228 As the American arbitration scholar, T. CARBONNEAU, has noted:229
"There is a body of legal rules that represents a world law on arbitration. States basically agree directly and indirectly on those legal principles that should attend the operation and define the legitimacy of the arbitral process. These rules of law surround arbitration and regulate its activity on a world-wide basis. They have arisen as a result of the arbitral process and represent its acceptance within most national legal systems. They constitute, in effect, a body of world law on the procedure and regulation of arbitration that is highly consistent in both principle and policy."
The existence of a modern lex mercatoria remains a controversial one, especially in common law countries, where some critics deny that there can be any such thing as transnational norms having legal force independent of contractual incorporation, national statutes or international Conventions. The debate in itself says much about the difference between common law and civil law thinking.230