German legal education and practice in the area of private law1 is dominated by a specific problem solving methodology. Some German legal writers even suspect that methodology may have taken control over substantive law.2 Despite its obvious significance, to date such methodology has not provoked much academic discussion.
This article introduces the German problem solving model and discusses its significance. It further tries to examine whether other jurisdictions have developed similar methodological tools. In particular, the difference between Civil Law3 and Common Law4 seems to suggest that different methodological approaches must be taken in related jurisdictions so far as the handling of private law problems is concerned.
Legal education in Common Law systems normally refers to “problem solving”5 when it comes to ask students to analyse disputes, that is to decide how a specific dispute should be resolved on the basis of the applicable law. As shown below, however, the topic of this article is not limited to merely giving advice on how to deal with problem solving questions in legal examinations in order to guarantee the best possible grades. Further, this article does not aim at the discussion of forms of dispute resolution, such as arbitration, mediation or court proceedings, nor does it address legal writing skills. On the contrary, it focuses on the task of identifying potential (private law) problems arising out of a set of given facts and the sequence in which they should be dealt with. In other words, it discusses the structuring process of private law problem solving, which precedes the actual process of private law problem solving. The methodological devices, which are of relevance in this context, are of direct practical importance for any type of legal work in the area of private law. It is, therefore, the ultimate goal of this article to identify and explain these devices and thus facilitate their application in practice.6
Scope of Research
The scope of this article had to be limited. Therefore, I will only discuss private law methodology.7 Moreover, the article focuses on substantive law.8 Consequently, procedural questions and questions of private international law will not be considered. Further, it was necessary to concentrate on two legal systems for the comparative analysis of the German approach: the Common Law system with a focus on English law and the People’s Republic of China as a developing legal system9 and the country with the largest population worldwide. In addition, the IRAC10 method, which is used in particular by many US and Australian law schools, will also be taken into (comparative) consideration.
Problem Solving in Germany
Continental European law, especially German law, has developed in a very different way from Common Law. Whereas law in Germany (after the reception of Roman law) had, and still has, an academic and theoretical quality, from its beginning Common Law was of a rather forensic and pragmatic character.11 Consequently, it has been argued that it comes “as no surprise that the techniques of discovering and applying the law, indeed the typical methods of legal thought as a whole, have developed very differently”.12
Germany’s private law system13 is probably the most eminent example of a Civil Law system. As indicated above, German legal education and also, consequently, Germany’s legal profession, is dominated by a certain methodological approach when it comes to the structuring of private law problem solving. Historically, this methodology has been developed since the 1950s and has been acknowledged and “picked up” in a more substantial way by academics during the 1980s.14 The major textbook introducing this approach was written by Dieter Medicus and first published in 1968.15 However, to date there has hardly been any deeper scholarly discussion of this approach and its scientific justification. Further, it is interesting to note that such a methodological approach seems to have one of its main origins not in academic writings, but in the training provided by private lecturers (so-called “Repetitoren”) who act outside the (public) German universities. The up to two-year-long courses offered by these private lecturers are designed especially to prepare students for the state examinations and are attended by the major proportion of German law students.16
The Step-by-Step Method
Generally speaking, according to the afore-mentioned methodological approach, private law problems in Germany are to be solved on a step-by-step17 basis as follows:
Step 1 Analysis of the facts of a problem in order to determine and identify claim relationships between different parties;
Step 2 Identification of a legal rule as the hypothetical basis of a specific claim;
Step 3 Identification of the preconditions for the application of such a legal rule and examination that these preconditions have been fulfilled, that is that the claim has been established;
Step 4 Verification that the original claim is still with the claimant;
Step 5 Examination of the enforceability of the claim.
Following is a more detailed discussion of these different steps, in particular their significance for the problem solving process.
Step 1: Obtaining Control Over the Facts
In order to be able to identify the legal questions that are to be answered as an initial step, the facts of a given problem/dispute must be analysed. For this purpose claim relationships, that is actual or potential claimants and defendants, must be identified.18 In other words, “Who Wants What from Whom?”19
For the sake of transparency and in order to avoid confusion, it is necessary in this context that relationships between different parties (“Who from Whom”) must be “broken down” to two-party relationships.20 Only the analysis of claim relationships between two parties guarantees the possibility of a clear distinction between the (potentially different) legal situations of different claim relationships. For example, in a given situation it could be that “(a) A wants B to pay damages” and “(b) A wants C to pay damages”.21 It must be regarded as methodologically wrong to start the examination on the basis of the (confusing) assumption that “A wants B and C to pay damages”. This is because such an approach would obviously hinder a clear distinction between A’s (potential) claims against B from those he or she might have against C. A’s (potential) claims against B may, as far as preconditions and legal consequences are concerned, be totally identical with those A may or may not have against C. But that is not necessarily the case, for which reason a distinction from the start of the legal analysis is required. If more than one claim relationship22 can be identified, then all of them have to be analysed23 on a separate basis, as further explained below.
The same applies with regard to the object of the claim (the “What”). If different objects of potential claims are to be discussed, then for the sake of transparency a separate analysis for each object is required.24 For instance, it would be correct to say that “(a) A wants B to pay damages” and “(b) A wants B to pay an agreed purchase price”. However, for the abovementioned reasons it would have to be regarded as methodologically incorrect to state that “A wants B to pay damages and the purchase price”. Again, this is due to the fact that the preconditions for the payment of damages and for the payment of the purchase price may not be the same, and therefore a joint examination may cause confusion.
Step 2: Identification of a Hypothetical Legal Basis of the Claim
The next step in the legal analysis of a problem is the identification of a hypothetical legal basis for a specific claim of each party against another party.25 A claim only exists if it is acknowledged by the law, that is, if it can be based on a legal rule. Consequently, it is necessary to start out with the identification of such a rule as the basis of a claim.26 This identification can at this stage only be accomplished on a hypothetical basis since the final decision requires verification as to whether or not all claim-related preconditions have been fulfilled, that is if such rule can really serve as a legal basis for the related claim.27 Nevertheless, it is necessary to start out with the identification of such a hypothetical legal basis of a claim in order to be able to determine the direction of any further analysis, that is,in order to decide which preconditions must be fulfilled for the establishment of the claim. Consequently, it is regarded as methodologically incorrect if the analysis of a claim relationship starts with a specific, but abstract, legal question, even if such a question were the main problem.28
Which rules can serve as the basis of a claim? Only legal rules may function as the basis of a claim that grants to one party a certain claim against another party (upon fulfilment of stipulated preconditions)29 as opposed to legal rules that do not provide for such contents, such as, for example, stipulations which serve to define legal terms30 or for explanatory purposes.31 These rules can either be found in the law itself or in contractual provisions on the basis of which one party (the claimant) has the right to request the other (the defendant) to do something, or not to do something. The question as to which legal rule can serve as the basis of a claim is determined by two aspects. First, the related rule must, as a matter of fact, stipulate the legal consequence that one party (the potential claimant) has a claim against the other (the potential defendant).32 Related rules always take a conditional approach as follows: “If … [=identification of pre-conditions], then … [= legal consequence: claim of claimant against defendant].”33
The second aspect that needs to be considered for the identification of a legal rule as basis of a claim (only) comes into play where the claimant requires a specific legal consequence. In such a case the potential basis of the claim must lead to exactly such a consequence.34
In a particular situation it may be possible to base a claim on different legal rules. In this case, a comprehensive legal analysis would have to deal with all of the rules which support the claim in order to be able to assess all existing alternatives.35 But, again, the examination must distinguish between different legal rules, claim relationships and the object of such claims for the sake of precision, transparency and in order to avoid confusion. In the event that more than one hypothetical basis of a claim has to be analysed, it is generally assumed that a special order of examination should be observed. As a general rule those claims which may be pre-determining for others should be examined first. In Germany the following order of examination is commonly accepted: (1) contractual claims; (2) quasi-contractual claims (for example, pre-contractual liability); (3) claims based on property rights; (4) claims based on unjust enrichment; and (5) claims based on torts law.36 The ratio behind this order is the attempt to deal first with those legal questions that are likely to be pre-determining for other questions. For example, contractual claims are to be analysed first because the contract is the most specific regulation of a related claim-relationship and can therefore determine the examination of other legal rules, which may serve as the basis of a claim.37
Step 3: Analysis of the Preconditions of the Claim
Step 2 aimed at the identification of the basis of a claim (only) on a hypothetical basis. Whether or not such a basis can in fact support a claim in a given situation is subject to the fulfilment of the preconditions for the application of the related legal rule,38 which are, in the case of statutory law, normally set forth by the related stipulation itself in theoretical terms. The identified hypothetical basis of the claim therefore determines the sequence of further legal analysis.
For the purpose of examining (in step 3) whether or not the preconditions for the application of a certain rule that shall serve as the basis of a claim have been fulfilled, again a two-step examination is necessary. First, the related preconditions need to be identified on an abstract basis.39 Having identified the preconditions (on an abstract basis)40 one must examine if, in the current situation, these preconditions have been fulfilled.41 If the preconditions have been fulfilled, then it can be concluded that the claim has been established. Otherwise, the examination of this particular claim basis must be stopped here for the value of efficiency. The final conclusion would then be that the respective legal rule can not serve as a basis for the claim.
Step 4: Verification that the Original Claim is still with the Claimant42
If the examination in Step 3 has led to the result that the claim has been established, then further legal analysis is necessary. This is because the fact that the claim has (once) been established does not necessarily mean that the claimant is still holding this claim.43 There are basically three reasons why this may no longer be the case: (i) the claim could have been transferred to another party (for example by way of assignment agreement); (ii) the claim could have been extinguished (for example by way of fulfilment or termination); or (iii) the claim could have been amended (for example through conclusion of an amendment agreement). It is logical to analyse these questions only after the examination of Steps 2 and 3 above, because only the establishment of the claim allows for its transfer, extinction or amendment.
The examination should only be continued if it can be concluded at this stage that the claim is still with the claimant. If the claimant has lost the claim for whatever reason, then the analysis must be stopped here in order to avoid superfluous work.
Step 5: Examination of the Enforceability of the Claim
Even if – as a result of the examination in Steps 2 to 4 – the claimant still holds the original claim, it must finally be analysed if the claim is enforceable.44 A claim is only enforceable if it is not permanently or temporararily blocked by defences.45 The unenforceability of a claim would not affect its existence as such,46 but would block its realisation for reasons set forth by substantive law.
Reasons for the (permanent or temporary) lack of enforceability could, for example, be that the (statutory or contractual) time limit for bringing in a suit has expired (permanent obstacle to enforceability) or that the claimant has failed to fulfil corresponding obligations47 (temporary obstacle to enforceability),48 which enables the defendant to refuse performance. The enforceability of a claim must be examined at this final stage because only if a claim has been validly established and is still (unchanged) held by the claimant can its enforceability be questioned.