2.3 Purposes and Classification of the Law Flashcards
Introduction / purposes of business law / classifying the law
What are the eight purposes of business law?
- Accountability
- Transparency
- Flexibility and autonomy
- Efficiency
- Certainty and predictability
- Acting in the business’ interest
- Dispute resolution
- Preventing disaster and failure
Why is accountability important?
Perhaps the key focus of business law is to ensure that business are held to account for their unlawful acts and omissions.
What are the two notable benefits of requiring business transparency?
Transparency = requiring businesses to disclose certain information.
- Enables regulators and stakeholders to hold businesses to account, which can’t occur if business conduct is done in secret.
- If businesses know they are required to disclose certain information then they will take steps to ensure that they are conducting themselves lawfully.
Why might the effectiveness of transparency be limited?
The effectiveness of transparency in attaining these goals will depend upon the accuracy of the information being disclosed.
Therefore don’t want the disclosure to become too cumbersome. Important for a variety of stakeholders when making decisions related to the company.
Why must laws exhibit flexibility?
Must exhibit flexibility to ensure that businesses can react to new opportunities without undue restriction.
What are the two ways that the law provides flexibility?
- Providing businesses with autonomy - (eg through contracts for conducting transactions).
- Allowing businesses to draft certain rules by which the business is run through the Articles of Association.
What is the importance of efficiency within the law?
Parliament and the courts must consider the cost and impact that the law will have upon a business and its efficiency.
This is the reason for the ‘comply or explain’ approach adopted by the UK Corporate Governance code.
Why does business law need a degree of certainty and predictability (balanced with flexibility)?
- Businesses must be able to rely on the law and they cannot do this with confidence if it is unclear
- Laws must adapt and evolve BUT if amended too frequently businesses may struggle to stay up-to-date and may suffer unnecessary costs
- Predictability allows businesses to conduct themselves in a manner that doesn’t breach the law/cause costly litigation.
Business law should try to minimise the need for costly litigation. Where it does arise, what are the three systems of dispute resolution?
- Legal proceedings in court
- Tribunal
- Alternative Dispute Resolution (ADR)
How does business law try to prevent disaster and failure for businesses?
- Seeks to prevent or minimise damages to third parties from unlawful behaviour by prohibiting certain conduct and promoting good governance.
- In some cases, the law seeks to help failing businesses through rescue mechanisms to help financially struggling companies return to profitability/survive e.g. company voluntary arrangements, moratorium, administration).
Civil law and criminal law have differing aims, procedural rules, and consequences.
What parties are involved in civil law?
In civil law, the parties are:
1. The person who sustained the loss (the claimant) who sues the
- The person who caused the claimant’s loss (the defendant).
What parties are involved in criminal law?
The State (R - Regina or Rex) prosecutes the Defendant
What is the usual first-instance court for civil law?
County Court or High Court
What is the usual first-instance court for criminal law?
Magistrates’ court or Crown Court
Where is the burden of proof placed in civil and criminal law?
In civil law, the burden of proof is usually placed upon the claimant.
In criminal law, the burden of proof is typically placed upon the prosecution.
What is the standard of proof required for civil law?
In civil law, the claimant must prove the case on the balance of probabilities.
What is the standard of proof required for criminal law?
In criminal law, the prosecution must prove the case beyond reasonable doubt.
What is the outcome of a civil vs criminal law trial?
In civil law, if the claimant succeeds then he will be awarded a remedy.
In criminal law, the defendant is either guilty or not guilty. If guilty, the defendant will be punished (imprisoned or fined).
What three meanings can the phrase common law refer to?
- Legal systems based on that of England
- The body of laws created by judges
- The unified system of law that arose following the Norman conquest (making law common to all).
What are the two meanings of civil law?
[Common law and civil law]
- In relation to laws that do not impose criminal liability (instead they impose civil remedies like compensation).
- Legal systems based on Roman Law
What typically categorises legal systems based on Roman law?
- Bulk of the law is found in written codes
- Judiciary role is only to interpret law
- Weight placed on senior judges but do not tend to have a system of binding precedent
- Civil law systems tend to have a career judiciary where judges are trained straight from university
[Common law and statute law]
Common law also refers to the body of laws and decisions created by judges in decided cases and subsequently applied via the doctrine of precedent.
What is meant by the term statute law?
Statute law refers to laws created by Parliament (legislation).
What is equity in comparison to common law?
Rather than being laws ‘common to all’ (common law), the history of equity saw petitions sent to the Lord Chancellor which were not based upon precedent or procedure but upon fairness and justice in the individual case.
What new remedies were developed under equity?
- Injunctions
- Specific performance
Which prevails - common law or equity?
In cases where tensions arise between the two, equity prevails.
What is public law?
Public law refers to laws that regulate the relationship between the state and persons within the state.
E.g. human rights laws and criminal law
What is private law?
Private law refers to laws that regulate the relationships between people (state is usually not party to the legal proceedings).
E.g. contract law, employment law, company law.
