Chapter 1 - Legal Principles & International Law

Question 1

What is civil law?

Answer 1

Civil law regulates disputes between private individuals and organisations.

Question 2

What is criminal law?

Answer 2

Criminal law regulates with behavior that is or can be construed as an offense against the law

Question 3

Compare the following with regards to the similarities and differences between civil and criminal law: i) Terminology to describe involved parties, ii) Aim of legal action, iii) Settlement iv) Standard of proof, v) Burden of proof, vi) Main remedies, vii) Who brings the action?, viii) Who decides the outcome?

Answer 3

Question 4

Summarise the difference between criminal and civil law

Answer 4

Under both laws it is the legal consequences which are different, not the cause

The same event may give rise to both criminal and civil actions. However, the former may lead to punishment of the responsible individual by the state and the latter compensation of the injured party - criminal law does not give redress to individuals and aims to punish whilst civil law does not punish but aims to give redress to affected parties.

Question 5

What are the two main sources of laws that judges will refer to?

Answer 5

• legislation
• case law

Question 6

What is legislation?

Answer 6

Legislation (or statute law) is law created by Parliament

Question 7

What is primary and secondary legislation?

Answer 7

Primary legislation’ is the term used to describe the main laws passed by the legislative bodies (i.e, Parliment)
Secondary legislation (or delegated legislation) is designed to add further detail or amendments to primary legislation and is created by specialist individuals as directed by an Act of Parliament - enables Parliament to focus on the purpose of the statute while leaving the detail to experts

Question 8

What powers do parliemnt have with regards to legislation? (4)

Answer 8

• Repeal earlier legislation
• Overrule case law
• Make new law
• Codify case law - convert case law into legislation

Question 9

What is case law?

Answer 9

Case law (or common law) is a law that’s based on judicial decisions from previous cases, rather than statutes, constitutions, or regulations.

Question 10

Should case law be followed?

Answer 10

Generally, yes.

Many judgements are precedent for future cases which means that they must be followed unless superseded by legislation or the decision of a higher court.

Question 11

What is important to remember about legislation regarding developments in society, business and technology?

Answer 11

The more changes we see in society, business, and technology, the more our laws need to evolve to
respond to them. Case law can, to some extent, set new precedents. However, when there are clashes
or inconsistencies, legislation changes are likely to be required

Question 12

What is the structure of the court system in the UK? Explain, with a suitable diagram, the hierachy of the courts and which types of cases are heard in each court

Answer 12

It is divided into the civil courts (which deals with civil cases) and criminal courts (which deals
with criminal cases).

At the bottom of each hierarchy you have the ‘courts of first instance’ (county courts for civil and magistrates court for criminal) which hears the case when it first enters into the court system. From that point the cases can progress up the chain of hierachy depending on the complexity, up to the high courts.

Decisions in courts can be appealed, where these appeals can progress up through the court systems up until the supreme court.

Question 13

What are the alternative ways civil disputes can be settled outside of court?

Answer 13

• Tribunals
• Alternative Dispute Resolution

Question 14

What is a tribunal? What are them main differences to court proceeding

Answer 14

A tribunal is a specialist judicial body that hears disputes in specific areas of law.

• Tribunals are often less formal and more accessible than courts
• Decision is binding on those involved in the case but not future cases, but they will be recorded and may be taken into consideration in the future.

Question 15

What is Alternative Dispute Resolution?

Answer 15

Alternative Dispute Resolution is a process where parties with a dispute use any type of procedure, or a combination of procedures, to resolve their differences, rather than go to court.

Question 16

What are the key procedures in Alternative Dispute Resolution?

Answer 16

• arbitration
• mediation & conciliation

Question 17

What is the process of arbiration?

Answer 17

Arbitration is when an independent third party (chosen by the parties, usually lawyers) makes a decision on a dispute to resolve it. They act in a similar way to a judge in a court case.

Question 18

What must be agreed upon for arbiration to take place?

Answer 18

An arbitration agreement which sets out what the process involves as well as rights and obligations of the parties (e.g being able to appoint an arbitrator).

Question 19

What is the process of mediation & conciliation?

Answer 19

Mediation & conciliation is when an independent third party (chosen by the parties, usually lawyers) the parties to resolve their dispute. In these cases, the third party does not act like a judge, instead they work to assist the parties in coming up with their own solution to the issue.

Question 20

What are the advantages and disadvantages for ADR for the following points: i) Expertise, ii Cost, iii) Privacy, iv) Solutions, v) Speed

Answer 20

Question 21

Are the decisions made in ADR or tribunals legally binding?

Answer 21

No, these can still end up in court if a decision cannot be made or one party chooses to dispute the result

Question 22

What are the two main sources for law for human rights in the UK?

Answer 22

• The European Convention on Human Rights
• Human Rights Act 1998.

Question 23

What does the European Convention on Human Rights set out? What has the UK signed up to?

Answer 23

It sets out a number of rights and freedoms that a human should have

The UK has signed up to 16 of these:

Question 24

What is the final appeal court for the European Convention on Human Rights

Answer 24

The European Court of Human Rights (ECHR) in Strasbourg.

Question 25

What is the Human Rights Act 1998? What does this law mean with regards to the ECHR?

Answer 25

The Human Rights Act 1998 embeds the European Convention on Human Rights into UK law.

The Human Rights Act 1998 also means that individuals in the UK can have their cases heard in the UK courts

Question 26

What laws can two trading with each other internationally apply?

Answer 26

Parties can agree in advance which laws will apply in the case of dispute:
* The laws of one of the countries from which one of the parties resides
* International law – parties can choose to adopt international rules developed by United Nations (UN) and International Chamber of Commerce (ICC)

Question 27

What is the United Nations Convention on Contracts for the International Sales of Goods 1980 (UNCISG)?

Answer 27

UNCISG is a source of contract law parties in different countries (which contract to the UN Convention) can choose to apply to their dealings.

Question 28

Outline the main contract types for which the UNCISG applies and for those for which it can’t

Answer 28

Question 29

What are the obligations of the buyer under UNCISG? What are the obligations of the seller under UNCISG?

Answer 29

Obligations of the buyer:
* To pay the price for the goods and comply with any formalities to enable payments to be made

Obligations of the seller:
* To deliver the goods to the place and at the time agreed in the contract
* If the contract does not set out the place of delivery, to follow the rules regarding place set out in the convention
* If the contract does not set out the time of delivery, to deliver the goods within a reasonable time of the contract being formed
* To deliver goods of the quantity, quality and description set out in the contract and to package them in the agreed manner
* If the contract does not set out the quantity, quality and packaging requirements, to follow the conformity requirements set out in the convention

Question 30

What does the UNCISG determine with regards to risk and what terms can be used to assist this determination?

Answer 30

The Convention determines when risk passes from one party to the other.

Incoterms can be used to assist this determination

Question 31

Outline the ICC incoterms that apply for any form of transport and describe each

Answer 31

The terms run from the minimum obligations of the seller (at his place of business) to the maximum obligations of the seller (at the buyer’s place of business, essentially the exact opposite of the first one)

• EXW – Ex works (goods available at seller’s place of business)
• FCA – Free carrier (seller clears the goods for export and delivers to a named carrier)
• CIP – Carriage and Insurance Paid to (seller pays for carriage, clears the goods for export, and insures the goods)
• CPT – Carriage Paid to (seller pays for carriage and is responsible for clearing the goods for export. The risk passes to the buyer once the goods arrive at the named destination)
• DAP – Delivered At Place (seller bears all of the risks in delivering the goods ready to be unloaded at a named place)
• DPU – Delivered at Place Unloaded (seller bears all of the risks of delivering and unloading goods at a named terminal)
• DDP – Delivered Duty Paid (seller bears all costs and risks from clearing goods for export, delivery, and clearing goods for import at a named destination. In effect the seller must discharge all of the delivery and customs responsibilities)

Question 32

Outline the ICC incoterms that apply for shipping and describe each

Answer 32

• FAS – Free Alongside Ship (seller delivers the goods to the ship and bears the export charges only)
• FOB - Free On Board (seller has ‘delivered’ the goods when they are cleared for export and pass the ship’s rail at the named port of shipment)
• CFR – Cost and Freight (seller pays for delivery, however, the risk transfers to the seller once the goods are loaded onto the ship, the buyer must arrange their own insurance)
• CIF – Cost Insurance Freight (seller pays for delivery of the goods, and must insure them (though only at the most basic level of cover) during transit.

Question 33

What governs Islamic law?

Answer 33

Islamic finance is governed by Sharia law

Question 34

What is meant by Riba (usury) with regards to Islamic finance?

Answer 34

Riba (usury) is the concept of unlawful gain in Sharia law. It is usually translated as interest.

This is a very technical area and you are not required to understand exactly what riba means. For our purposes it means that in Islamic finance, charging or gaining interest is forbidden.

Question 35

How does Islamic finance navigate around Riba for loans?

Answer 35

A loan to purchase an asset (e.g. a mortgage on a house) is structured so that the bank buys the asset, then sells it to the borrower at a higher price (making a profit). The borrower then pays the price of the loan over a period of time. The bank owns the asset until the final payment is made.

Question 36

How does Islamic finance navigate around Riba for deposits (i.e. savings account)?

Answer 36

When a person deposits money in a bank, such a deposit is seen as an investment, which the bank manages on behalf of the depositor. When the money is returned, it is return with the profit from the investment, less a management fee for the bank.