Law and public administration - Theme
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This chapter aims to consider law, both as a concept and within its wide context.
Law is the set of rules by which a state or community operates; they govern the actions of the subjects and can be enforced by the imposition of penalties, such as fines or imprisonment.
Law is applicable in social, political and economic disciplines; it relates to all citizens. It is a body of rules that concern many different subjects, such as people, animals, companies and institutions. It outlines both substantive rules of law and the procedures people use when law is applied or enforced.
Everyday examples of the laws that relate to citizens include:
Law is necessary to maintain order in society. Without law, the state would be disorganised, leading to chaos. Formal regulation is needed in order to regulate the affairs of not just human activity but also larger companies and public bodies.
It is important to not view law in isolation. Law consists of a set of subjects that all have an impact on each other. Law is at the centre of an interlinked variation of academic disciplines. When studying law, boundaries must be waived; law must be viewed within context. Lawyers must also be aware of the dynamics of law; how it works and why.
Law must be able to provide some guidance about how to conduct oneself. It sets a standard as to how people can be judged. In doing so, it has to reflect the opinions of the majority of the population, so that it can be imposed without controversy.
There are two important terms to know regarding morality: ethics and metaethics. Philosophers consider the former to be the study of morality itself, whereas the latter examines morality in its abstract nature. Regarding the debate about ethics, there are two general views: objectivism and relativism. Objectivism believes that there is an absolute set of moral principles. Relativism believes that morality is relative. In other words, it can evolve over a period of time and differs from society to society. The argument is that morals are a consequence of independent human thought and therefore are reflective of individual or societal views.
There are three types of duties: moral duty, legal duty and social duty. A moral duty is owed between people in relation to the accepted ethical standards being used. A legal duty, by contrast, is created by law as opposed to a set of moral principles. Social duties differ from the aforementioned duties; they are concerned with more informal duties that contribute to the daily functioning of society. These three duties have a strained relationship with each other. Two examples of this are illustrated by questions such as, first, whether discrimination against an employee because of their weight should be illegal, and second, whether same-sex marriage should be legal.
There is an inherent overlap of these duties. This overlap is examined below.
1. How do legal duties interact with moral duties?
Not all moral duties can be enforced by law. For example, adultery is illegal in certain countries such as Saudi Arabia and Pakistan, whereas in the United Kingdom (UK), that is not the case. Though one cannot be held criminally liable for adulterous acts in countries like the UK, public opinion still has it that adultery is immoral. Also, moral duties cannot be awarded legal protection because some are difficult to maintain/regulate, or they are beyond the scope of a state's involvement.
The Nazis were able to pass immoral laws that severely discriminated against the Jewish population of Germany because they orchestrated social prejudices against them. They did this in two ways. First, they established penalties for those who avoided complying to Nuremburg Laws. Secondly, legislation acted as a medium in the manipulation of the social attitudes of the general population towards the Jews.
2. How do legal duties interact with social duties?
It is impossible for the government to enforce legislation that does not coincide with the social attitudes of the state. Society determines whether or not certain conduct is acceptable. In the past, legal rules reflecting the social values of the state was the norm. This is no longer the case in modern societies as legislation matching all social values would constitute severe problems. For example, one would not expect to be imprisoned for skipping a queue, but one would expect punishment for theft. The Nuremburg Laws highlighted the need for legislation to follow social attitudes - Hitler manipulated these attitudes prior to passing the laws. He was aware that they would only be deemed legitimate to follow if they reflected the values of the general population.
3. How do moral duties interact with social duties?
According to philosophers of morality, there is a clear distinction between social principles and morality. Consider Oscar Wilde and his homosexuality. In many modern moral cultures, homosexuality is mainstream and acceptable. However, Wilde also refers to a practice that many in the same societies would deem amoral - sexual acts between adult men and adolescent boys. In Ancient Greece, such acts were acceptable in society, despite being immoral in today's opinion. Objectivists highlight the fact that in some societies, social and moral values differ - this opens a gap for laws to be passed that follow suit to social ideals instead of moral ones.
Ideally, laws should reflect social practices which in turn could be justified morally. However, because morality is relative between people and thus not everyone will agree on what is moral, this is virtually impossible.
Law is necessary to maintain order in society. Without law, the state would be disorganised, thus leading to chaos. Formal regulation is needed in order to regulate the affairs of not just human activity but also larger companies and public bodies. Objectivism believes that there is an absolute set of moral principles. Relativism believes that morality is relative; in other words, it can evolve over a period of time and varies from society to society.
Ethics are divided into three categories: virtue theories, duty theories and consequentialist theories.
What are virtue theories?
According to philosophers such as Aristotle, virtue theory concerns itself with the development of good traits of character. He valued the 'good life' over acquiring monetary wealth. Though generally unaccepted in modern society, virtue theory is visible when politicians encourage the notion of social responsibility through volunteering efforts. David Cameron’s Big Society initiative is an example of virtue theory in practice. Thomas Hobbes had a more pessimistic and contrasting view of this. He believed humans to be selfish by nature and viewed morality as a man-made social contract to prevent a war of all against all.
What are duty theories?
Duty theories set out fundamental rights and obligations of the people in society. For duty theories, the distinction between natural and positive law is clear: the former is not validated by man-made concepts such as sovereignty, while the latter is seen as the real law of the land because man made it so.
What is consequentialism and utilitarianism?
This theory attempts to examine the consequences of our actions. The morality of an action is determined by the goodness of its outcome. In other words, there is a focus on legislations that work to promote the greater good, where the means are justified by the end goal.
All three of these theories interlap, though the last two are more relatable to modern society than the first.
This question addresses two of the more controversial aspects of law, namely abortion (termination of a pregnancy) and euthanasia (medically assisted suicide at the request of the patient).
Abortion, Roe v Wade
In the United States, the Roe v Wade case stated that the right to privacy extended to a woman's right to an abortion on demand. In society, the two main stances on the issue are pro-choice and pro-life. The stance taken by the Supreme Court has been shown to reflect public opinion on the matter; it fluctuates as the numbers change depending on polls. Supreme Court law tends to reflect social values of the time.
Euthanasia, Diane Petty
A female patient suffered from motor neurone disease, which caused her great suffering and interfered with her quality of life by making her virtually immobile. She requested assisted suicide with the aid of her husband but was denied it by the UK government under the Suicide Act 1961. Public opinion polls suggested that there is great value placed on the preservation of life.
Jurisprudence is a discipline that aims to figure out how and why laws are made. It helps to understand the impact of a law when it is put into practice. Jurisprudence studies the nature of law as a concept. This helps to add historical, political and social context to the law. Rule of Law is a key aspect of jurisprudence, because it allows lawyers who actually work with the law to consider its significance in the real world.
There are four main characteristics of jurisprudence: natural law, positivism, realism and critical legal studies.
Natural law
For the perspective of natural law, what gives laws their legitimacy is the natural morals of human beings. It is especially important in cases of judicial reasoning such as in human rights law. Here, the principles of natural law are promoted and the importance of the moral force is necessary for the completion of the views of legal authority. An example of this is Islamic law.
Positivism
According to positivism, law and morality are independent of each other. Law derives its authority from the fact that it is a man-made invention recognized by the general society. It is legitimate because the state has deemed it so, it is not a natural moral force. The main focus is on understanding how a law obtained its authority in society.
Legal Realism
In legal realism, law is determined by how it is used during the procedural element of it, i.e., how it is used by the courts. The emphasis lies on how law works in practice rather than in theory.
Critical Legal Studies
The running theme of this characteristic is summed up in the following quote: "all law is politics". The rules of law are foisted on society by a dominant group in that society. According to this view, political motivations are intertwined with legislative and judicial acts.
In order to effectively examine and develop relevant legal principles, understanding why the law is the way it is, is important. Law is a social construct that stems deeper than just being placed within a moral context.
Jurisprudence aims to figure out how and why a law is made - it is necessary to understand the impact of the law when put into practice.
Why should laws be obeyed? Regardless of the morality of a given law, it is important that the legitimacy of the law is respected. Not agreeing with a certain rule does not negate the obligation to abide by it. The example given is tax legislation. There are two themes that derive from this:
Grundnorm is a term that legal theorists use for a law that provides legitimacy to subsequent laws. It essentially means basic rule. All of the laws in a jurisdiction can be characterised as norms - each of these norms are in turn legitimised by a broader basic principle until it is no longer possible to legitimise it further. Though fundamental, Grundnorms are subject to change, particularly in the event of the admission of a new administration that institutes a new regime. Time is an important factor regarding the Grundnorm, because in order to find rules that legitimise other rules, we must trace them back in time, starting from the most recent rule.
The main characteristic of a sovereign actor is that they can impose their own will without restriction from other actors. Positivists such as Hobbes believed that law received its legitimacy, not because of nature, but because it is the prevailing law of the jurisdiction during that time. One of the consequences outlined by legal and political theorists is that a sovereign body cannot bind its future self. There is a clear distinction in sovereignty: de facto sovereignty and de jure sovereignty. De jure sovereignty lies in the formal body of authority that make the laws, while de facto sovereignty lies in the hands of those who actually make decisions. De facto sovereignty in the UK resides in the Cabinet, for example. The UK is a unitary state, because all powers that local authorities have are granted to them by Parliament. By contrast, in states such as Germany and the United States sovereignty is shared on a federal level. In the United States for instance, powers that are not expressly conferred by federal government remain with the individual states. Some powers are reserved for the states and some for the federal government. Sometimes sovereignty is evenly shared between various institutions in a state.
Eisenhower stated that the way to recognise rule of law is to "recall what has happened when there is no rule of law" (in reference to Nazi Germany).
Rule of Law comprises the characteristics that are needed in order for a civilised state to function properly. Lord Bingham identified eight sub-rules of Rule of Law:
In the absence of Rule of Law, sovereignty would remain with the individual and thus disorder would arise. In other words, "there is no place for industry". Each would work for their own benefit. Hobbes argued that individuals must surrender aspects of their personal sovereignty to the state in exchange for a guaranteed structured society. A characteristic of Rule of Law is that laws are not arbitrary, meaning they are not based on random choice but rather on reason in a set system. Legal certainty is necessary for citizens to anticipate the nature of the obligations they have to the state.
The positivist view of Rule of Law is that fairness in a system of law does not really matter, as long as it exists and abides by clear rules. Rule of Law should be able to allow its subjects to plan their lives.
Some argue that Rule of Law is more aspirational than realistic. For example, the governments of the USA and Zimbabwe can both aspire to legitimise the concept of Rule of Law in their societies, but fall short when certain rules are simply ignored or certain laws are applied arbitrarily.
According to some theorists, the idea of Rule of Law is a Western construct which is not cannot always be applied in other parts of the world for cultural reasons. Because different cultures have varying needs regarding rights and obligations, this also applies to the functioning of laws. An example of a Western construct of law is contract law. In other countries, bribery and barter trade are more commonplace forms of business as opposed to controlled agreements in writing. The culpability of a bribe is an alien concept in some cultures. Some sociologists call the spread of Western standards and culture to other civilisations ‘cultural imperialism’.
Rule of Law comprises the characteristics that are needed in order for a civilised state to function properly.
Separation of Powers is the division of powers within a state's government, with the aim to prevent an accumulation of excess power in the hands of one person or branch of government. This concept was introduced by Charles Montesquieu. In short, there are three branches of government (trias politica): the legislative, judicial and executive branch. Executive power belongs to the government, judicial power belongs to the courts and legislative power is of the legislature (creator of law). Each of these branches play a different but significant role in the functioning of the state. Ideally, there must not be any overlap between the branches. However, it is nearly impossible to meet this criterion, since states involve people and institutions which are open to human error. Also, the branches differ globally; for example, Chinese government consists of five branches. The system of checks and balances was put in place because the branches cannot operate in isolation. This system keeps each in check and ensures the maintenance of the balance of power.
For example, in England and Wales, this doctrine ensures that public bodies operate within their powers and don't go outside their allowed scope of action. In the UK, the Queen of England remains the head of all the branches of government. The Queen’s Government is the executive branch, the legislature is parliament and the courts constitute the judiciary, so it differs slightly from the United States. To conclude, the success of states depends on the embodiment of the Rule of Law, in particular the characteristic of Separation of Powers.
While the first chapter considered the theories of law in its context, this chapter looks at how these have manifested in the legal systems of England and Wales. It also addresses the language of law in both countries by introducing the essential terminology lawyers are required to know.
The limitation to a lawyer's ability to practise law is his or her jurisdiction. The term jurisdiction is used to refer to a particular place where the law can actually be applied. It also means having the power to enforce the law and settle disputes in a particular area or field.
The term legal system is largely synonymous with jurisdiction. It is the body of institutions that create, enforce and carry out dispute resolutions of the law of the jurisdiction concerned.
The British legal systems are complex, especially since there is an overlap of jurisdictions for the different types of law. The political system of the British Isles continuously evolves and develops.
British Isles
The British Isles are made up of two states - Republic of Ireland and the United Kingdom, with the monarch Queen Elizabeth being the Head of State. Ireland achieved its independence in 1922, thus separating itself from the rest of the UK in a political and legal sense.
United Kingdom
The United Kingdom (UK) includes the following countries: Scotland, Wales, England and Northern Ireland. Parliamentary legislation has jurisdiction over the whole UK.
Great Britain
Northern Ireland is politically and legally excluded from Great Britain, so legislation made in Great Britain does not apply to Northern Ireland. Both Northern Ireland and Scotland have different legal systems in line with the 'legal forum' in which disputes are settled. Citizens of both countries are, respectively, subject to the laws of their countries only. Though they are similar to the UK in the sense that they are common law systems, they do not mirror that of England and Wales. The legal systems of the two countries are particular to their countries.
England and Wales (the main focus of this chapter)
Wales annexed to England in the 13th century - in 1282. Since then, the legal term to describe the legal system there is English legal system.
Recognising the institution that created a certain law and the time period it was made in is important to determine which rule takes precedence. In England and Wales, the legal system has a combination of sources.
The government majority lies in the House of Commons and they are responsible for the introduction of most of the laws made by Parliament - they are usually called Acts of Parliament, statues or legislation. Legislation is divided into primary legislation and secondary legislation (to be discussed in Chapter 4).
The courts have independent, non-elected judges. Case law is created by senior judges who reach decisions on the cases before them. In other words, this is common law; the judges interpret the sources of law and consequently develop case law. The judiciary has a quasi-legislative role (remember the Trias Politica as discussed in previous chapter); the judges develop case law through their decisions, and at times can fill gaps in legislation.
EU law is taken into account and incorporated into UK law by the European Communities Act 1972 and the European Convention on Human Rights (ECHR). The UK is also bound to international law. EU law and ECHR are separate to each other and their judicial branches are distinct, but they both have an impact on the English legal system.
There are some specialized areas of law that concern certain areas of activity, such as military and ecclesiastical law. Any other law that does not belong to the specialised category is known as 'civil law'.
All areas of common law can be traced back to pre-Victorian English legal systems, most of which were around at the time of the Great Britain colonies. The development of English case law is therefore relevant, although it is very broad subject. Law does not operate in isolation, it is a collection of varying disciplines. History plays an important role in the development of law. The two traditional sources of law in England and Wales are case law and statutes.
Common law mostly consists of binding judicial decisions that develop a general body of case law. In jurisdictions like this, legislation is not the only source of law as some principles of law can be stated in some courts, which can then bind later judges. In civil law systems, cases do not develop into 'self-standing' legal principles. There is a tendency to not have binding case law.
How did English case law develop over time?
William the Conqueror gained control over a country by gaining control over its legal system. He travelled around the country, accompanied by a court, and made decisions regarding the grievances of his subjects; the term King's Bench (now Queen's Bench) was coined as a result of this practice. As time passed, this role was delegated to Justices. Local customs were applied, as there was no unified, national set of laws. Henry II formalised this system when he divided the country into circuits. These were areas where the judges were to visit regularly. This practice was abolished in 1971, but a version of this still exists in the United States.
What are the drawbacks of common law?
The only way a person was able to litigate in a King's court was through a writ, a document that covered the facts of the case. They were problematic because not only were they inflexible, but a minor mistake could lead to the collapse of an entire case. This caused particular problems in mortgage payments, especially in the instance of some lenders being unavailable on the date of payment, resulting in loss of land for the borrower. There was only one remedy for such civil wrongs: compensation. This was not always appropriate.
What is equity and where does it come from?
In short, equity means fairness. It has morphed into supplementing the common law with rights which are based on fairness. The position of common law is normally considered before equitable rules because common law 'follows the law'. The law of equity was developed by the Chancellor at the Court of Chancery. From that point onward, writs were no longer necessary and remedies were no longer limited to damages. Equity also introduced the notion of a trust. A trust is the legal interest one has vested in the beneficiary with regards to the use of land or other property. A trust is a form of legal title. In common law, a subject only has rights if they possess a legal title. Equity has been criticised to be too erratic, because it is based on the conscience of the Counsellor. It is too broad and vague a norm, and thus an uncertain measure. In summary, a trust is the right to hold property on behalf of another (beneficiary).
What are equitable remedies?
Damages were not always adequate or appropriate to meet the needs of the claimant, so equitable remedies were developed. They are discretionary, it is up to the court to determine whether the parties are deserving of the exercise of equity. Two important examples of these remedies are injunctions and the decree of specific performance. Injunctions are a request from the court to act or refrain from an act. Decrees of specific performance are when the court orders a person to perform an act according to a contract or trust.
What is the discord between common law and equity?
Equity developed as a supplement to the common law. In other words, equity functioned as an alternative forum for dispute settlement. As time passed, equity challenged common law, rather than supplement it. James I decided in 1615 that equity prevails over common law. This decision declined in value, as equity hardened into the inflexibility of common law. It soon became cumbersome and slow to obtain justice.
Amalgamation of courts of common law and equity
The Supreme Court of Judicature Acts of 1873 and 1975 merged common law and equity. Equity can now at times be used as a defence against common law claims. Also, civil courts are able to grant both common law and equitable remedies in the same action. For example, an injunction can be ordered with an addition of damages to be paid.
Statutes have begun to replace common law as a primary source of law in England and Wales. Initially, until about the 15th century, statutes were merely laws that were passed with Royal authority. Soon, the consent of the House of Commons became a necessary requirement. Because parliament is the law making body in the UK, parliamentary sovereignty is created. Statutes and parliament, by the 19th and 20th centuries, represented the democratisation of society. As the 20th century progressed secondary legislation became of great importance, as primary legislation was unable to keep up with the demand for regulation (this demand came about as a result of the social democratic model that involved state ownership of utilities and central planning). The number of statutes, however, has been reduced since the 1960s. This is mainly due to the increase in statutory instruments and the increasing complexity of legislation.
The term Brexit refers to the decision taken by the UK on the 23rd of June 2016 to leave the European Union (EU). EU law applies (has jurisdiction) in the UK. The European Communities Act 1972 was instituted because international law did not apply in the national legal system. This act enabled EU legislation to be incorporated in the UK legal system without Parliament needing to legislate on a separate occasion. When Brexit takes effect, this will probably cease to be the case. This system is known as a dualist system because EU law is not automatically binding, as it needs to initially be incorporated into domestic law by Parliament. Here are some examples of how EU Law impacts UK subjects:
There are seven EU institutions:
The term international law is a misnomer, because there is no sovereign body that can bind states to international law in the way a sovereign state binds its subjects to national law. However, the conduct of states shows that there is a body of rules they abide by. The United Nations is the main executer through its organisations such as WHO, UNICEF, UN Women, UNESCO, WIPO etc. Other sources of international law include customs, judicial decisions and other general principles. 114 states have ratified the Vienna Convention for instance, which regulates the entry and conduct of treaties. The treaty is binding, but its main idea is consent; states consent to be bound by treaties. An example of this is the Law of the Sea, which is an area of law governed by international law. Among others, there is a strong emphasis on human rights. Other examples include the Universal Declaration of Human Rights 1948, which makes human rights a main topic of consideration in international law.
How is international law enforced?
International law is enforced by International Tribunals and Courts:
While the first chapter considered the theories of law in its context, this chapter looks at how these have manifested in the legal systems of England and Wales. It also addresses the language of law in both countries by introducing the essential terminology lawyers are required to know.
Over a short period of time, there have been drastic changes in the world's economies. For instance, economies that are controlled by the state have been exposed to the general principles of the market. Furthermore, there has been a reduction and, in some cases, an elimination of legal monopolies. Also, there is a large number of multinational companies in operation across the globe.
Regarding the jurisdictional competence of a State, there are two key elements in play. They are as follows:
The question still remains as to whether public international law allows jurisdiction to be taken on the basis of effects alone. One country that has embraced the effects doctrine is the USA. This is present in the case United States v Aluminium Co of America (Alcoa); Judge Learned Hand established that States are able to impose liabilities for conduct that is outside their borders but that has consequences within their borders. This case played a pivotal role in the US acceptance of the effects doctrine. For instance, The Sherman Act of 1980 does not apply to conduct involving trade or commerce with foreign nationals unless this conduct has a direct, substantial and foreseeable effect on US commerce or trade. Another question arises, a more controversial one, concerning foreign plaintiffs and damages. Are foreign plaintiffs able to sue for damages in a US court, even if the harm occurred outside of the US? It was concluded in Hoffman-La Roche v Empagran SA that, if the plaintiffs had suffered damages in Ukraine, Panama, Australia, and Ecuador, they could not sue in the US. Foreign plaintiffs cannot recover damages in the US. A significant element of the judgement in this case was that it left open the question as to whether the foreign plaintiffs were able to sue in the US, if the injury was unable to be separated from the domestic harm caused by the cartel to the customers in the US.
A comity can be defined as an association of nations for their mutual benefit. There has been attempt by the US courts to apply the effects doctrine in a restrictive manner - there should not only be substantial and direct effects, but also the presence of the respective interests of the US and of other States which may be offended by the assertion of the doctrine to be weighed against each other. This is traceable to jurisdictional rule of reason by Brewster. The concept of applying reasonableness when dealing with matters is met with criticism because the court is not seen as the most appropriate forum to conduct such a process. In the Motorola v AU Optronics, the court held that the plaintiff's position would increase the global reach of the Sherman Act - this would create friction with many foreign countries and the buildup of resentment at the US's efforts to assume the role of world's competition law police.
An example of extraterritorial action in the United States is present in the case Institute Mereiux. The FTC took action after an acquisition by the Institute of BioSciences company due to a perceived detriment to the competition in the US in their market for anti-rabies vaccines. The implementation of the Institutional Antitrust Enforcement Assistance Act 1994 was intended to improve the US' enforcement agencies' ability to acquire evidence situated abroad, by providing reciprocal agreements between the US and other countries to facilitate the exchange of information. The US entered multiple agreements with other countries, such as the Cooperation Agreement with Colombia in 2014.
Antitrust laws are not only applied to extraterritorial behaviour that affects imports into the US, but also where American companies are obstructed by anti-competitive behaviour in a bid to gain access to the foreign markets. The Department of Justice of the US threatened to apply these antitrust rules against Japanese practices that affect the US exporters by excluding them from Japanese markets. As a result, the Japanese government substantially increased penalties to be imposed for infringement of Japanese legislation. One of the first cases where the US took action abroad to challenge an action that denied foreign access was US v Pilkington. The latter in the end agreed not to assert certain provisions in tech licenses against US firms.
The Court of Justice of the European Union has not specifically ruled that there is an effects doctrine in the EU, because it has always been possible in articles 101 and 102 of the EU Merger Regulation - jurisdiction has been based on other grounds, such as the single economic entity doctrine or when the agreement was entered into outside of the EU but was implemented into it afterwards.
What is the economic entity doctrine?
The single economic entity doctrine was established in the Dyestuffs case. The Court intended to treat all three companies and their parent companies as a single economic entity. This was criticised because it not only disrespected the independent nature of each company but also because the claim of the Court that a single parent was in charge of the subsidiaries was based on limited evidence. The crucial question is whether the parent company has decisive influence over its subsidiary company. The fact that the parent owns all the shares means they have the ability to exert such influence and creates a rebuttable presumption that such influence was indeed exercised.
What is the implementation doctrine?
The Wood Pulp I case held that jurisdiction could be based on the concerted practice in the EU. It can be referenced to the widely recognised territoriality principle of international law. The Court also held that a cartel was indeed implemented in the EU. There was no comment or reference as to whether this position would have stood if the agreement had been implemented outside of the EU but had created economic effects within it. That would have so in the case of, for example, a collective boycott by members of a non-EU cartel where they deny service to customers within the EU. The question would then arise as to whether this agreement was implemented in the EU because of the refusal to sell there.
What is the qualified effects doctrine?
The Commission has often asserted the fact that EU law recognises the effects doctrine, backed up by several Advocate Generals - though the Court of Justice has not made a definitive statement in this regard. An important case to note is Intel v Commission wherein the latter decided there was an infringement against Article 102. Intel disagreed with the assertion of jurisdiction by the Commission. The General Court ruled as follows: to be able to justify the Commission's jurisdiction, it must be established either by qualified effects of the practice in the EU or by the fact that it was implemented in the EU. The Court says these are alternative requirements, as opposed to cumulative. The qualified effects meet the criteria of immediate, substantial and foreseeable in the European Union.
How do investigators acquire information?
The Commission has the intention to carry out investigations on trade associations within the EU that represent non-EU business. The fact that they are non-EU businesses does not entitle these associations to refuse to submit to the investigation of the Union. In the case Slovak Telekom v Commission the Court held that the Court was entitled to require the company to relay information relating to its conduct that took place prior to Slovak Republic accessing to the European Union.
How are final decisions reached?
There is the question as to whether a final decision can be served on non-EU undertakings. This, in other words, is the act of enforcement as opposed to stating objections. The Court of Justice held that its decisions on non-EU dealings are valid.
What are the jurisdiction criteria in the EUMR?
According to article 1(2) of this regulation, for any concentrations that have an EU dimension the European Commission has to be notified in advance. Concentrations have an EU dimension when there is a combined turnover of the undertakings that exceed EUR 5,000million worldwide, provided that at least two of these undertakings have a combined turnover of EUR 250million within the European Union and that their business is not primarily situated in one and the same Member State (this is dealt with in Article 1(3) of the EUMR).
What was the ruling in Gencor v Commission?
In this case, the Commission prohibited a merger between two South African undertakings because they believed it would result in a dominant duopoly in the markets of platinum and rhodium, thus impeding effective competition in the internal market. The General Court supported the Commission and further added that the turnover of these undertakings exceeded the threshold outlined in Article 1(2) of the EUMR. The requirement in this article is consistent with the judgement in Wood Pulp I. Comity analysis should be undertaken in the application of the EUMR.
The UK has always taken the view that jurisdiction cannot be based solely upon commercial effects on the market, but the territorial and nationality principle are applicable. This is evident in the submission of the UK government in the Wood Pulp case, as it maintained its dissent with the effects doctrine.
The Alcoa case incited a number of battles between the USA and other States that disagreed with the extraterritoriality application of US antitrust legislation. A number of countries have passed block statutes or executive orders in attempts to thwart an excess of assumptions of jurisdiction by the USA. No provisions of EU law have this effect, as it is left up to the individual Member States and their governments. The UK's hostility towards the US practice has resulted in the Protection of Trading Interests Act 1980. An early example of the UK's attempt to prevent the extraterritorial application of US law came in 1952 with the passage of the Shipping Contracts and Commercial Documents Act 1964. These provisions led to the prevention of disclosure of information to US authorities. At a common law level, the UK court has the discretion to order a litigant to restrain foreign proceedings that are oppressive, An example of this is found in Midland Bank plc & Laker Airways plc: the Court of Appeal ordered Laker to discontinue proceedings against the former in the US, because it would have involved the extraterritorial application of US antitrust legislation.
Problems can occur as a result of transnational mergers, for instance when several competition authorities investigate the same transaction but have opinions on whether it should be allowed or not. International cooperation between the competition authorities have higher chances of achieving successful and effective solutions. Below are examples of the steps that have been taken towards greater international cooperation between the competition authorities.
They have been highly successfully in practice. The level of cooperation between them is greater than it was in the 90s. This success is shown most effectively by the substantially reduced number of disagreements between states.
Over a short period of time, there have been drastic changes in the world's economies. For instance, economies that are controlled by the state have been exposed to the general principles of the market. Furthermore, there has been a reduction and, in some cases, an elimination of legal monopolies. Also, there is a large number of multinational companies in operation across the globe.
A contract is the agreement between two or more consenting parties that is legally binding on all of them. Not all agreements are deemed contracts because not all of them have legal sanctions. A common agreement between friends, for example, can be broken without legal sanction and as such does not qualify as a contract. All contracts have clear terms that must be adhered to according to the requirements of and from each party. Terms that are vague cannot be deemed binding on the parties involved. The main sources of contract law are case law and legislation.
Large businesses use so-called standard form contracts. The terms are set out in a written document and the person wishing to contract can either accept the terms of said contract or refuse them, but they cannot be negotiated. The Consumer Credit Act 1974 regulates some of the content in the standard form contract. An example of a standard form contract is passengers on coach travel not being permitted to consume hot food whilst aboard the coach.
Besides explicit terms, contracts also have implied terms. The parties to the contract are bound to both explicit and implied terms in it. For example, terms for the fitness of foods for consumers are outlined in the Consumer Rights Act 2015.
Certain laws prohibit some types of contractual clauses to the effect that if such clauses are included in a contract document, they will have no legal effect. An example of this is the Unfair Contract Terms Act 1977, which states that certain clauses that seek to remove culpability for death or injury through negligence are legally ineffective.
There are three main issues that concern contract law:
Essential elements of a contract are:
Contracts that are void have no legal effects, therefore they actually are not contracts. There was never one and there is not one presently. A voidable contract is a contract that is binding on one of the parties, but the other party has the option to set it aside.
An unenforceable contract is valid and the parties to it have the liberty to follow through with it. However, if one of the parties chooses to not carry out their part of the contract, the courts will not enforce it.
Most contracts are bilateral. A bilateral contract consists of a promise made by one party in exchange for a promise from the other one. A unilateral contract is a contract where one party promises to do something in return for the completion of a specific act. This can include refraining from an act.
There are three forms (or requirements) of a contract:
An agreements is necessary for the existence of a contract. This agreement consists of an offer and its acceptance. One party (the offerer) makes an offer that outlines the terms of the contract and the agreements and the other party (the offeree) can accept it, demonstrating their willingness to be bound by the terms of the contract. The court determines whether a statement was an offer by looking at the intentions of the parties, inferring them from the circumstances of the case.
Because an offer is a proposal with terms for another person to agree to, it is important that the offer is not vague. For instance, in the case Guthing v Lynn (1831), the court decided that the proposed offer was too vague for it to be open for acceptance. If an offer is vague, then there are specific terms that can be inferred to be more definite so they can be enforced in a contract. Imprecise terms can be inferred from previous dealings between parties and from general trade custom.
A person cannot accept an offer they do not know about, so it is important for those offers to be expressed by either speech, writing or conduct (Bloom v American Swiss Watch Co, 2015). An offer can be made to one or more persons or to the world at large, but it cannot be accepted by a party without the party’s prior knowledge of it.
A unilateral contract is a contract in which the offerer promises to perform an act, which usually consists of the payment of money. Such contracts can be completed by anyone who fulfils the obligations that are set out in the offer (the offers are made to the world at large).
An offer can be accepted, but it can also be brought to an end. There is a variety of ways of doing so.
Acceptance is the unconditional agreement with all the terms of the offer, for example when an offeree delivers goods to the offerer (Brogden v Metropolitan Railway Company, 1877).
There must be an agreement of the exact terms set out in the offer by the offerer. The introduction of new terms will be taken to mean a counter offer. Several exchanges of forms before a contract is known as the 'battle of forms'. The last form is what becomes the offer, as opposed to the standard forms that are each considered to be a counter offer.
Acceptance has to be communicated to the offerer and received by them at their place of business. In the event that the communication is not clear, for instance if there is a broken telephone line (Entores v Miles Far East Corp, 1955), the courts looks at the circumstances of the case. Acceptance must be communicated by the offeree or his authorised agent. The communication is not effective if an ordinary third party informs the offerer of the offeree's acceptance of the terms.
If there is no particular method of acceptance stated by the offerer, then the court will accept any reasonable method that the offeree uses. If there is a required method of acceptance, then the acceptance is only effective if it is communicated in that way or in an equally effective manner.
There are two exceptions to the rule that acceptance must be communicated.
What about electronically made contracts?
Websites are often considered to be invitations to treat, due to the offer-seller dynamic and the considerations of time limits. The Electronic Commerce Regulations 2002 regulate how contracts are made over the internet.
This paragraph will examine the issues related to the formation of contracts. There will be objective to learn about the capacity to enter contract, creates of legal relations and commercial and domestic agreements.
The parties must have an intention for the agreement to have legal rights and obligations in order for the agreement to be legally binding. It is not always clear whether the parties to a contract actually wanted it to be legally binding and enforceable. If the parties disagree, it is then up to the courts to decide whether there was an 'intention to create legal relations' or not.
In cases where there are agreements between a family or a similarly close-knit community, the courts generally do not intervene, usually working under the presumption that there is no intention for the agreements to be legally binding (Balfour v Balfour, 1919). This presumption also covers agreements between friends and work colleagues (Hedley v Kemp, 1999).
The presumption that parties do not intend to enter into legal relations can be easily rebutted by evidence of a contrary intention. The court will usually find that there was such an intention, especially when the families were willing to put their finances at risk. This presumption between husband and wife does not apply after separation.
Parties that are entering into a commercial or business agreement are presumed to have the intention to create legal relations, for example, when free gifts are offered when promoting a business (Esso Petroleum Ltd v Commissioners of Customs and Excise, 1976). So called honor clauses state that an agreement is not legally binding on the parties involved. This can rebut the presumption that business agreement have the intention to enter into legal relations - Rose and Frank v Crompton Bros Ltd (1925). If a person is interested in a business, they can write a comfort letter. Such a letter encourages lenders to extend credit to the business by stating that the business has the ability to pay off its debts. These letters are not legally binding (Kleinwort Benson Ltd v Malaysia Corp, 1989).
If the agreements are ambiguous, regardless of whether there was intention or not, the courts will presume that the parties did intend for the agreement to be binding. The parties have to prove that it was not legally binding and that there was no such intention to create a legal relationship. The agreement can be enforced by the courts if parties cannot prove that there was no intention (Edwards v Skyways, 1964).
A contract is the agreement between two or more consenting parties that is legally binding on all of them. Not all agreements are deemed contracts because not all of them have legal sanctions. A common agreement between friends, for example, can be broken without legal sanction and as such does not qualify as a contract. All contracts have clear terms that must be adhered to according to the requirements of and from each party. Terms that are vague cannot be deemed binding on the parties involved. The main sources of contract law are case law and legislation.
The terms of a contract involve the contract’s content, which explains the parties’ legal obligations and duties.
When the terms of a contract are being determined, it is essential to know what the parties said or wrote. During negotiations, multiple promises and statements are made over a period of time. Not all these statements and promises are included in the terms of the contract. During negotiations, the following four types of statements can be made:
The intention of the parties is the appropriate factor to consider when determining whether a statement is a representation or a term. To objectively test the intention of the parties, the following question is asked: “What would a reasonable person consider to be the parties’ intention when looking at the various circumstances of the case?”. Other factors which the court will take into consideration to determine the intention of the parties are:
A binding contract must have a certainty of terms, meaning that there must be substantial agreement on the meaning of the terms used in the contract. When determining whether the terms have this certainty, the court takes into consideration what a reasonable person would think.
Express terms are the terms which are actually written down or orally stated by one of the parties. Implied terms are the terms which are not expressly stated by one of the parties involved, but are actually included in the terms of contract. This could be done by:
There are three types of a contract’s term:
Sometimes conflicts arise about the right terminology. In that case, the court will determine the classification of the term.
An exemption clause is an express clause in the contract which aims to exclude or limit the liabilities of one of the parties towards the other. This clause attempts to exempt a party from specific liabilities for breach of contract.
There are two types of exemption clauses:
These exemption clauses are often present in standard term contracts. An effective exemption clause conforms to the following criteria:
The House of Lords determined that no law exists that makes exclusion clauses invalid, if they attempted to exclude liabilities for a fundamental breach of contract.
The terms of a contract involve the contract’s content, which explains the parties’ legal obligations and duties.
In international sales, the Vienna Convention on Contracts for the International Sale of Goods (CISG, hereafter also referred to as the Convention) is regarded as the most important legal instrument in the field of international sales. The CISG is built on work done by its predecessors. The convention is inspirited by, based on and built on the Rabel and UNIDRIOT, The Hague Conventions and the United Nations Commission on International Trade (UNCITRAL).
In the late 1920s, professor Rabel worked on the creation of an international uniform sales law. Rabel’s work was taken on and developed by UNIDROIT. UNIDROIT worked on the preparation of an international law on the sale of goods. These developments resulted in two Hague Conventions. Neither Convention is considered as a resounding success. The Hague Conventions have had an effect in Europe, but they did not have any impact elsewhere. Despite the unsuccessful results, the conventions are considered as the starting point for the drafting of the CISG.
The work of UNCITRAL is considered to be the origin of the CISG. The Hague Conventions were sent to all governments, inviting these governments to comment on the Conventions and to notify their attitude towards ratification. This consultation process resulted in the preparation of a new convention. The crucial value adding characteristic of UNCITRAL contains the universal representation. When finalized, the Convention was not implemented immediately. The Convention came into force in 1988. Today, the Convention has been ratified by 83 states.
The sphere of application of a convention is considered as a fundamental part of any international convention which regulates transnational commercial law. The major question here is: “to which contracts is the Convention to apply?”.
Article 1 of the CISG is one of the provisions that significantly assists in the definition of the sphere of application. Article 1 includes the following terms:
Multiple problems arise out of this article, such as:
Article 1 (1) (a) states that the Convention applies to contracts for the sale of goods between parties that have their businesses located in different states, provided these states are contracting states. Today, the Article 1 (1) (a) is considered as the most important provision related to the sphere of application of the Convention. The practical significance of Article 1 (1) (b) decreases due to the increase of the number of states that has ratified the Convention.
Article 1 (1) (b) is more problematic than Article 1 (1) (a). This due to the balancing act conducted by Article 1 (1) (b). Article 1 (1) (b) includes an extension of the sphere of application, because the Convention does not only apply under the condition that both parties have located their business in contracting states. The article makes it possible that the convention applies in a situation where one party’s business is located in a contracting state and the other party’s business is located in a non-contracting state. This extension causes an issue. In the situation where the rules of private international law of the forum state result in the use of the law of the non-contracting state, then the domestic law of the state is applied. However, when those rules of private international law result in the use of the law of a contracting state, the CISG will govern the contract and not the domestic law of the contracting state. Therefore, the consequence of Article 1 (1) (b) is a diminishing effect on the significance of the domestic law of the contracting state in favour of the CISG.
The solution for the controversy of Article 1 (1) (b) involves the permission for states to enter an Article 95 reservation, which enables a state to declare that it will not be bound by Article 1 (1) (b). Article 95 has been criticised on two grounds. Firstly, Article 95 would reduce the reach of CISG and undermine the effective spreading of this modern, well-designed tool. The second criticism concerns the technical legal difficulties caused by Article 95.
The reservation of Article 95 has the following different effects in distinct situations:
Exclusions from the convention
Subjects that are excluded from the Convention’s scope are matters such as the validity of the contract and the effect that the contract may have on the property in the goods sold. The pragmatic reason for this exclusion involves that the law related to the validity of contracts and the passing of property is sharply distinct between different nation states and making uniform rules on these intractable topics would have been extremely complex.
Contracting out of the convention
Article 6 of the Convention states that the parties to a contract of sale are allowed to exclude the application of the convention.
Article 7 of the Convention deals with multiple difficult issues. Article 7 includes the following:
The provision is related to issues that arise in the convention’s interpretation, of which two are discussed here.
The first issue is related to the CISG's international character and the need to promote uniformity in its application. These words intend to ensure that the Convention will be interpreted in the same way in different jurisdictions. As such, the Convention aims to have an autonomous interpretation, but the meaning of this autonomy is somewhat ambiguous. When national courts aim for this uniformity in interpretation, multiple problems arise. In trying to resolve the issues mentioned, two steps have been taken:
The second issue relating to Article 7 concerns the role of good faith. The problem exists due to the three different views on good faith:
Article 9 includes the following concerning usage:
The important difference between Article 9 (1) and (2) is related to the scope. Article 9 (1) implies that the usage does not have to be international, nor widely known and observed; agreement between the parties is sufficient. By contrast, Article 9 (2) is broader in its scope due to the possibility of incorporating well-known and observed usages. This applies even in case the parties did not establish an agreement to the contract.
Article 9 could be considered to include a hierarchical superiority to the Convention’s provisions. The binding usages that are imposed by either Article 9 (1) or (2) are seen as having priority over any other conflicting article in the CISG.
Part II of the Convention concerns the formation of a contract of sale. The CISG adopted the offer and acceptance framework. According to the Convention, acceptance takes place upon receipt, not upon posting. A state has the possibility to establish a declaration that it will not be bound by Part II.
Part III of the Convention is considered as the heart of the Convention. However, states do have the possibility to establish a declaration that they are not bound by Part III.
In chapter I concerning general provisions, two issues occur:
Chapter II concerning the obligations of the sellers is set out into three sections:
Chapter III concerns the obligations of the buyer. Paying the agreed price and taking delivery of the goods are the two obligations of the buyer. In case of breach of contract by the buyer the remedies available include paying the price, taking delivery or performing the other obligations of the contract.
Article 25 defines the concept of fundamental breach in the following terms: “A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.”
Article 78 sets regulations on the payment of interest in the following terms: “If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under Article 74.”
Article 78 does not address matters such as the rate of the payable interest and the date from which it is payable. This has resulted in significant difficulties in the majority of cases.
Article 79 includes the following terms:
The major difficulty resulting of this Article concerns the meaning of the word ‘impediment’.
Chapter IV relates to regulations on risk. The law uses the notion of risk to allocate the responsibility for accidental loss or damage to goods between the buyer and seller. In the majority of cases the allocation of risk is applied by the express terms of the contract. The CISG rules that the risk passes with control or custody of the goods.
In international sales, the Vienna Convention on Contracts for the International Sale of Goods (CISG, hereafter also referred to as 'the Convention’) is regarded as the most important legal instrument in the field of international sales. The CISG is built on work done by its predecessors. The convention is inspirited by, based on and built on the Rabel and UNIDRIOT, The Hague Conventions and the United Nations Commission on International Trade (UNCITRAL).
The discharge of a contract refers to the end of the obligations of the contract.
There are multiple methods of discharging a contract:
Discharge by agreement occurs when parties agree to discharge the contract before all the obligations of the contract are completed. This agreement to discharge the contract before the fulfilment of all the obligations is considered to be a second contract between the parties. This second contract is considered binding. There exist two types of agreements to discharge:
Discharge by performance is considered to be the ideal method of discharge of a contract. Here both parties performed all the obligations under the contract and the contract is discharged as a result of the completion of the contract. The general rule that applies to this method is that each party must have performed exactly and precisely what has been promised and agreed on by the parties. There are four exceptions to this general rule. In case of these four exceptions the contract is still partly enforceable despite the incompleteness of the performance. The four exceptions are as follows:
In case of discharge by frustration, the contract is frustrated by an event that was not caused by the fault of either party, which results in making the performance of the contract illegal, impossible or radically different from the agreed terms. When a contract has been frustrated, both parties are released from their obligations. Situations which lead to the frustration of a contract are the following:
The limits of the doctrine of frustration are the following:
When the contract is frustrated and therefore discharged, the contract will end at the occurrence of the frustrating event. Then both parties will be discharged from any obligations of the contract.
The Law Reform (Frustrated Contracts) Act 1943 has established the following provisions for discharged contract through frustration:
A contract is discharged by breach when one or more terms are broken by one of the parties or when one of the parties says in advance that he has no intention to perform the contract. The breach will only result in the discharge of the contract when the term is a condition or an innominate term facing crucial consequences after the breach.
There are five possible breaches of contract:
After the contract is breached, the injured party has to take reasonable steps to mitigate losses.
When a contract is breached, the injured party holds the right to claim one (or more) of the following remedies:
The most commonly claimed remedy are damages. The purpose of damages is not the punishment of the party who has broken the contract, but to bring the injured party to the financial position that is similar to the position if the contract had been performed. The damages can only be claimed for losses that are not too remote. The case Hadley v Baxendale is used to determine the remoteness of damage. Damages will only be rewarded in two cases:
In exceptional cases, the court makes use of the assumption of responsibility test. This test refers to the question whether the party has reasonably been contemplating the loss and also whether the responsibility for the occurred loss had been assumed by the party to be his responsibility. The amount of the damages must not bring the claimant in a better financial situation than he would have been in when the contract had been followed. In case the innocent party did not suffer any loss, the party will only hold the right to nominal damages.
The general principle for assessing the loss is to provide compensation for financial losses actually suffered. In case of a contract related to the sale of goods, damages are often assessed by determining at what price the specific good would have been sold on the open market. The duty to mitigate refers to the general rule that the innocent party should take steps to reduce the losses he suffers. A party does not have the right to claim for damages that the party could have avoided by taking reasonable action.
Liquidated damages refers the sum agreed on in a contract that should be paid in case of a breach of contract. In some cases, the sum stated in the contract is considered to be a penalty and therefore the courts will not enforce it. A liquidated damage clause is referred to as a penalty in case it is disproportionately in favour of the interests of the injured party.
In some cases, the innocent party may sue for the failure of payment of the agreed contract price rather than damages. This is considered as an action for price and not damages. Therefore, the rules concerning mitigation and remoteness are not applicable in this case. Usually, the innocent party is only able to sue for the agreed contract price from the moment that the party has completed his contractual obligations.
In circumstances when a party claims a specific performance, the court decides on the matter. Therefore, this remedy is considered as equitable. The equitable remedy will only be provided by the court in case it is in respect of both parties to do so.
There are limitations to an order of specific performance:
This court’s order to prevent a breach of contract is also referred to as an equitable remedy, which will only be allowed in cases where the court considers it as fair in all circumstances.
There are limitations to an order for injunction:
In case of a breach of a condition of the contract, the innocent party can treat the contract as repudiated and does not have to perform his obligations any longer.
This is not a remedy for breach of contract, but refers to returning a benefit that has been obtained. Restitution is based on the principle that one party must not unfairly benefit at the other party’s expense.
In circumstances where there is no agreement on a price for performance, the courts will award a reasonable sum based on the quantum meruit rule.
The discharge of a contract refers to the end of the obligations of the contract.
There are multiple methods of discharging a contract:
A tort is a civil wrong. For a tort there is a remedy available to the wronged person. This remedy usually consists of compensation. The law of torts states that in multiple circumstances duties are owed to persons and liabilities for negligence or wrongful actions are imposed by law. The main aim of the law of torts is to provide remedies to claimants who have suffered losses, harm or an infringement of rights. Strict liability torts refer to torts which enforce liability on a person despite the fact that this person did not do anything wrong. Vicarious liability refers to the circumstances in which a person is held strictly liable for torts caused by another person. This form of liability is common in business environments, as employers may be vicariously liable for their employees’ torts.
The law of torts and criminal law are both concerned with wrongs. The distinction between them lies with the purpose. The main purpose of the law of torts contains providing remedies for harm which people have suffered. The main aim of criminal law is the punishment of people that committed wrongs. In some situations both law of torts and criminal law can be applied to the same case. In case of a crime, the defendant is prosecuted by the state and when he is found to be guilty, the defendant will receive punishment such as imprisonment, fine, etc. In case of a tort, the defendant is sued by the claimant and when he is found liable, the defendant will be forced to pay compensation to the claimant.
The difference between the law of torts and contract law lies in their voluntary and involuntary natures. When referring to contract law, the parties voluntarily entered the contract and the agreed upon obligations imposed by the contract. In case of law of torts, the obligations are involuntarily imposed on a person by law. Sometimes the claimant can choose whether to sue the other party in the law of torts or in the law of contract. In both situations, the most common remedy is damages (compensation).
Negligence refers to an essential form of tort that includes a great variety of situations in which persons cause harm to others due to negligence. The following three elements are needed for a claimant to succeed in an action for negligence:
For a court to recognise a duty of care, the claimant must find an existing legal authority for a duty of care in those circumstances or the claimant must provide proof for the so-called three-stage test. The House of Lords established this three-stage test to determine the existence of a duty of care. The test consists of the following three requirements:
Sometimes, the courts are resistant to expand the duty of care. The reason for this reluctance is that this expansion may encourage a great number of comparable claims. This argument is referred to as the floodgates argument.
Pure economic loss refers to a situation in which the financial loss of the claimant does not have any relationship to physical injury of the claimant or damage to the claimant’s property. In cases of purely economic loss, the recovery through tort of negligence is very limited. Damages can be claimed for pure economic loss when there exists a contract between the parties. In general, the duty of care is not imposed in case of pure financial loss stemming from ownership of a product or a building which appears to be defective. Only in the situation where a special relationship between the parties is present, a duty of care will be imposed.
In order to establish a duty of care for pure economic loss caused by a negligent statement, the claimant must prove the existence of a special relationship of proximity between the claimant and defendant, which includes that the claimant has to prove the following:
Psychiatric injury is considered as a form of personal injury, but it is more difficult to claim for than in case of a physical injury. Courts are cautious to recognise a duty of care in case of psychiatric injury for the following reasons:
The problem is especially vivid in cases where the claimant suffers pure psychiatric injuries. A primary victim is someone who was actually threatened with bodily harm or had reasons to believe so, as a consequence of the negligent event. The primary victim is owed a duty of care for pure psychiatric injury in a case where it was reasonably foreseeable that a person of reasonable fortitude would suffer some kind of personal injury (physical or psychiatric) as a consequence of the negligence of the defendant.
In the case of a rescuer, the rescuer can only be classified as a primary victim under the condition that the rescuer either was or reasonably believed himself to be in danger of physical injury.
A secondary victim is a person who witnessed an accident or its immediate aftermath and as a consequence suffers a psychiatric illness. There are several requirements which must be met by the claimant in order to claim the defendant to be liable for the psychiatric injury caused to a secondary victim:
To successfully enforce a claim for negligence, the claimant must be able to prove that the defendant broke his duty of care. The claimant must provide the court with proof that the defendant acted in a way that a reasonable man would not have in these circumstances.
The standard of care is an objective test. The defendant should act with a level of care and skill which would be expected from a reasonable person. In case of a skilled defendant, the standard of care is the standard to which a reasonably competent person in that specific profession would conform.
Several other factors must be taken into account by the court when determining whether a duty of care was broken:
The breach of the duty of care is more likely in a case where the defendant’s actions have a high level of probability of having injury as a consequence.
For the caused breach of duty to be considered as reasonably foreseeable damage, two aspects are necessary. First of all, it should be beyond question that the defendant has caused the loss or damage of the claimant. Furthermore, the particular damage or loss must be considered to be reasonably foreseeable. Therefore, the damage should not be too remote.
To determine whether there is a causal connection between the breach of duty and the suffered damage the ' but for' test is used. This test poses the question whether the claimant would have suffered the loss but for the defendant’s negligence. In case the claimant would have suffered the injury in any event (even if the defendant would not have been negligent), the defendant is not considered as liable.
In case the breach materially contributed to causing the damage of the claimant by significantly increasing the risk of the claimant contracting a disease, the ‘but for’ test is be disregarded. Sometimes there is a number of possible causes for a specific loss. In that case the claimant must prove that the defendant’s action was a material cause of the injury.
The damage suffered will be considered as reasonably foreseeable when the damage is not too remote. To determine this matter an objective test is be conducted. The defendant is only responsible for the loss which a reasonable man would have foreseen as a possible and likely consequence of his particular action.
The specific nature of the damage suffered does not have to be foreseeable, if the damage was of a kind that is considered as being foreseeable, even when the injury is more severe than expected.
In case a victim has a specific susceptibility or weakness and suffers a more severe injury than a normal person, the defendant will be considered as liable to the full extent of the injuries of the claimant.
Usually, the intervening act applies in cases where the defendant’s negligence has caused a sequence of events resulting in harm suffered by the claimant. The intervening event could be an act by the claimant himself or an act undertaken by a third party over which the defendant did not have any control.
In case a defendant injures a claimant who has already been injured, he will be considered as liable only insofar as his act increases or infuriates the already existing injury.
In case the intervening act breaks the sequence of events, the defendant will only be considered as liable for the injuries which the claimant incurred prior to that event. The intervening event is the cause of the final loss suffered by the claimant.
In case a person suffers a loss caused by a defective product there are three options:
The last option has particular advantages. In the law of contract the liability is generally considered as strict and all damages caused by the breach of contract are recoverable, provided they are not too remote. However, in some circumstances a contractual remedy will not be available.
The manufacturers of products have a duty of care to the ultimate consumer in case the manufacturers intend to provide the ultimate consumer with the product without further examination. Other defendants could be the persons who have repaired, assembled or supplied the products.
Sometimes, more than one defendant will be considered as liable. In this situation, the defendant will be held jointly and individually liable.
When trying to sue the other party for a defective product in the tort of negligence, a problem arises for the claimant consumer. He has to prove that the defendant is at fault. The claimant must provide proof that the defendant has been negligent, meaning that he did not take reasonable care to protect the claimant against reasonably foreseeable events. The manufacturer may not be held liable in the following cases:
If the defendant is held liable for a defective product in the tort of negligence, the claimant can only claim compensation for personal injury, death or damage to property which was a consequence of the defective product, and for the financial loss as a consequence of the injury, death or damage. Generally, compensation for the defective product itself cannot be recovered. Furthermore, the claimant cannot claim compensation in case of a defective product which poses a danger but did not actually cause any injury.
The Consumer Protection Act 1987 provides an additional statutory remedy. The act enforces liability on businesses. Consequently, the Consumer Protection Act does not cover private individuals who do not act in the context of a business.
A tort is a civil wrong. For a tort there is a remedy available to the wronged person. This remedy usually consists of compensation. The law of torts states that in multiple circumstances duties are owed to persons and liabilities for negligence or wrongful actions are imposed by law. The main aim of the law of torts is to provide remedies to claimants who have suffered losses, harm or an infringement of rights. Strict liability torts refer to torts which enforce liability on a person despite the fact that this person did not do anything wrong. Vicarious liability refers to the circumstances in which a person is held strictly liable for torts caused by another person. This form of liability is common in business environments, as employers may be vicariously liable for their employees’ torts.
Intellectual property is defined as things created by the mind. It includes a wide range of different creations such as inventions, literary and artistic works, symbols, designs and images. A main characteristic of intellectual property is its intangibility. The most important intellectual property rights are copyrights, patents, trade marks and design rights. A single product can comprise multiple kinds of intellectual property.
Copyright sets rules for the creation and use of goods such as books, films, songs and computer programs. The aim of copyright is to prevent that others are able to copy or reproduce someone’s work without permission. A copyright exists for a defined period of time. Copyright is an automatic right, which means that no registration is needed and that the right is acquired at the moment a work is brought into existence.
To determine whether copyright applies to the situation, the following questions must be answered:
The property of copyright is applicable to the following goods:
The term original refers to creations which were not copied from others. It does not relate to the idea itself, but to the form of the expression. The aim of copyright is not to protect the actual invention or idea, but to protect the original expression of the idea.
The concept literary work refers to any written, spoken or sung work. It does not have to involve any literary merit. Literary work also includes a table or compilation, a computer program, a computer program’s design material and a database.
The concept dramatic work refers to work that could be performed and includes dance, mime, scripts and choreographic works.
The concept music work refers to music, therefore the tune and not the lyrics. The lyrics relate to literary work.
The concept artistic work refers to paintings, drawings, diagrams, maps, charts, plans and models made for sculpture. A sculpture is an item that has a visual appeal for its own sake. The term artistic work also refers to works of architecture and works of artistic craftsmanship.
The concept sound recordings refers to recordings that include a sound which could be reproduced.
The last concept typographical arrangement of published editions refers to the layout, font and lettering of pages of published works.
The existence of a permanent form of the work constitutes the main requirement for copyright. This includes any kind of recording such as writing, filming and audio tape. Copyright does not require any formal registration process. When the previously mentioned requirement is met, the work automatically acquires copyright.
In general, the creator of the work is considered as the owner of the copyright. But in case of an employee who creates a work in the course of his employment, the owner of the copyright will be the employer, unless the parties have come to a different agreement. In case multiple people have worked on the creation and the identification of each author’s individual contribution is impossible, the work is considered to have joint ownership. This joint ownership will exist even in the situation where the parties did not aim to create a joint ownership work and their contributions are not equal.
The form of the work is a crucial factor for determining the duration of the copyright protection. Different rules exist for works with varying natures.
The owner of the copyright has exclusive rights to rent, lend, copy or adapt the work and to play, perform or exhibit the work publicly. Furthermore, the owner of the copyright has the right to issue the work’s copies, communicate the work to the public and to give others permission to carry out any of the previous actions.
The term primary infringement of copyright relates to the people that are directly connected with copying the work. A person will be considered as liable for primary infringement of copyright if he takes actions which fall under the exclusive rights of the copyright owner without his permission. A primary infringement is established when the copies are based on copyright work and a substantial part or all of that work has been been copied. It is irrelevant whether a person is aware of the fact that the work is protected by copyright or not and whether a person does intends to infringe the copyright or not. An action is also considered an infringement in case someone authorises others to exercise the copyrights owner’s rights.
The term secondary infringement of copyright relates to people who deal in the infringing copies or facilitate the works’ copying in a commercial context. It is concerned with the commercial exploitation of copied work. This includes supplying, selling and importing the infringing copies. To be considered liable for secondary infringement the person should know or have a reason to believe that the copies are infringing copies and that their actions are wrongful.
Some actions are permitted with regard to copyright works. Special exemptions apply in case of educational establishments, libraries, archives and court or parliamentary proceedings. The degree and quantity of the use of the copyright work are important factors in determining whether the use is fair.
In some cases the copyright owner is able to license the use of the work directly to a particular costumer, in other cases the owner will use a collecting society or agency. The licensee has to pay royalties for the use of the copyright work.
The moral rights include the following four rights:
In case of the infringement of copyrights, the owner can take civil action. Usually, the owner applies to a court for an injunction to prevent further breaches and damages. Moreover, the owner can try to claim any profits made by the infringer and that the infringer must hand over all the copies in his possession. With regards to secondary infringement, a number of cases exist in which criminal offences are considered.
The term patent is referred to as an exclusive right given to the inventor to make use and exploit their creation for a limited time period, in exchange for a comprehensive description of the invention. A product or process which is a new technical solution to a problem is considered to be a patentable invention. This invention should be uniquely different from already existing products or processes. In order to acquire a patent multiple formal procedures should be completed, therefore the patent does not come into existence automatically. The exclusive rights to make, use and sell the patented invention is given to the inventor for up to twenty years. The existence of patents is an incentive to inventors. The public receives the knowledge of technological advances in return.
Law related to patent is complex and intends to ensure that protection is only given to innovative products and processes.
A patent can be granted if the following requirements are met:
Some cases are excluded from being patented, such as inventions which are referred to as contrary to the public policy or morality and inventions related to new methods of therapy, surgery, or diagnosis concerning humans and animals.
In general, the inventor is entitled to apply for a patent. Problems may arise in case (more than) one person other than the inventor adds value to the invention. In case an employee made an invention in the course of the business and his duties and an invention might reasonably be expected, the employer may be entitled to ownership of the invention. In these circumstances, the employee may have the right to be compensated under the condition that the invention should be of outstanding value to the employer. However, only a very small amount of employees’ claims are successful.
In case the actual inventor is not the person who applies for the patent, the inventor is entitled to be named in the application. The patent’s registration process is complex. The application should be made to the UK Intellectual Property Office (IPO).
The infringement of patent is a complex area of law and is often very costly for businesses. To determine whether an infringement of patents has taken place, the question is raised whether the other product or process is really so similar to the patented invention that it falls within its scope.
Actions that include a breach of patent are actions in situations such as:
As a defence against claims of infringement by private parties, these parties tend to use two arguments: non-commercial use of processes or products and the use for research and experiments.
The remedies available for inventors with infringed patent include an injunction, damages, an order to hand over the infringing products, and an order to hand over any profits made from exploiting the patent.
The concept of a trademark covers intellectual property that consists of any symbols or signs which designate distinctions between goods and services in the marketplace. A registered trademark protects the brand owner from competitors that make improper use of the trade mark. The customer may also be protected from buying the wrong or counterfeit goods or services. Trademarks help customers to recognise products or services that belong to a company and can be of great value to a business. A trademark needs to be registered for it to be effective. A trademark is defined as “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of another.” Signs are considered to be the most potent trademarks. The words represented graphically refer to the ability to be clearly described on paper by words, images or numbers. A trademark must be clear, precise and distinctive.
Particular signs are excluded from registration on absolute grounds, these include the following:
Certain emblems also cannot be registered without the consent of the relevant person. In some cases, marks are identical or similar to other trademarks that are applied on similar product or services and the likelihood exist that the public gets confused. In this case, the use of these marks is prohibited.
Similar marks are also prohibited for dissimilar goods, in the case that:
The application includes the representation of the trademark and a description of the goods and services to which the trademark will apply.
The concept collective trademark applies when a mark distinguishes the goods or services of members of an association from other undertakings.
The owner of the registered trademark will be entitled to put the ® symbol aside the brand and will have certain exclusive rights. These exclusive rights include the use of the mark in various ways, such as using the mark for packaging and on business papers or on advertisements. Initially, trademarks are registered for the period of ten years.
The moment someone uses the trademark or one similar to it in the course of business without the right to do so, an infringement occurs. It also may be considered as an infringement when a business’ trademark is used in search engine keyword advertising. In case a trademark is simply used as indication of goods or services, when a person uses his own name or when a trademark is needed to indicate the intended purpose of a product or service, there is no infringement.
The various remedies available include damages, an injunction to prevent the defendant from continuing the use of the mark, an order to account for the profits, an order to erase the offending sign from the goods or to dispose of them.
The term design right refers to intellectual property that protects the visual representation or look of products. Design rights are infringed in case another business uses the shape. There are two types of design rights:
Design rights automatically protect a design for 15 years. The first owner is considered to be the designer for all designs, unless a contract states otherwise, or the design was made by an employee in the course of the business and under their contract of employment.
After registration the design right will have greater protection. To be registered for design right, some conditions apply:
The design should be new and should have individual character. The owner of the design can apply for registration. The registered design right will last for five years and can be renewed every five years by payment of fees, up to a maximum term of twenty-five years.
In general, the design belongs to the actual designer. However, in case the designer made it in the course of employment or in case of a differing agreement the design may belong to someone else.
The owner of the design right has the exclusive right to make use of the design. Design right is infringed in case a person infringes the rights of the owner for commercial purposes without having a licence or authorisation. Remedies for this infringement include damages, order to account for profits and injunction.
Passing off is a tort that is committed in the case that a business markets its goods or services in a manner such that they seem to be the goods or services of another business. The passing off action protects the goodwill or reputation of a business. Extended passing off protects the goodwill that applies to classes of goods, often denoting superior quality.
In order to take action against someone for passing off, certain elements have to be present:
Intellectual property is defined as things created by the mind. It includes a wide range of different creations such as inventions, literary and artistic works, symbols, designs and images. A main characteristic of intellectual property is its intangibility. The most important intellectual property rights are copyrights, patents, trade marks and design rights. A single product can comprise multiple kinds of intellectual property.
In order to be identified as an intellectual product, the product should possess the following three essential features:
The essence of property could be identified as its excludability. In an economic sense, the exclusion rights provide the right to reserve the benefits of the protected product to oneself and to charge for others’ enjoyment of those benefits. Property related with excludability has one issue. Namely, the question how expansive the rights of exclusion have to be in order for them to be identified as rights of property. In conclusion, even the limited right to exclude others from the benefits of a product is properly identified as a property right.
The economic value of property right is contingent on the following three aspects:
Therefore, the commercial exploitation of property rights in an object can only be considered to be a possibility and not a certainty.
A considerable amount of power is associated with the form of control over an object that is represented by exclusionary rights of property. Due to the intangibility of the intellectual products, the property rights have a more expansive scope and therefore are considered as more restrictive of public freedoms than the property rights related to tangible products.
In political terms, the exclusionary rights of property result in relationships between individual right holders, objects of property, and the excluded third parties which are state-sanctioned. This enables the right holders to determine the third parties’ rights and duties concerning the protected objects. Thereby, different narratives are supported concerning the value of those objects and the relationships between the property owners and the members of the public. In political terms the importance of IP ownership, including its capacity to be transferred contractually, is frequently addressed.
The property rights concerning intellectual products could be referred to as supportive of capitalist enterprise by transforming creative labour into productive and alienable labour, and intellectual products into commodities that are handled separately from the social relationships in the context of which they are created. Therefore, IP rights are criticized by feminists focused on a different range of social structures and the narratives which their enforcement and construction support.
In the construction of social and economic relations, two issues are considered important in IP. Namely, biopiracy and biodiversity. The term biopiracy refers to the use of indigenous and developing communities’ biological and other resources by European and other western firms to arrange inventions, the use or the benefits of which the communities are then excluded from by the western patent grants and international patent laws.
The Convention on Biological Diversity addresses the sovereign rights over natural resources and obligations to:
In natural law, individuals have a right to protection of their personhood and personal autonomy. This account from personhood derives from the theories of Georg Wilhelm Friedrich Hegel, who views the intellectual product as the creator’s external manifestations of his personality. The account proposes the idea that each intellectual creation includes the development by the creator of his personhood, therefore of his personal autonomy. Through this creation process, the creator comes to occupy the particular product which he created as an extension of himself. The capacity of personhood theories to provide explanations of copyright and moral rights regimes is limited. The acceptance of the personhood theories of IP has an important consequence, which is the requirement to recognize the claims of all creators, including the creator’s products which involve the use of existing intellectual products.
One issue related to personhood theories of IP is the failure of these theories to make a distinction between the creation of an intellectual product on the one hand and the continued existence of the intellectual product on the other.
The second view on the existence of IP from natural law holds that the creator of intellectual products deserves property because of the respect that he is due (it is his just desert). The basis of this view includes one or more of the following three aspects:
These desert arguments have a broad appeal and application. The supporters face an issue concerning the question why it is that the creators deserve property rights in respect of the created product.
A quite different view on the existence of IP holds that IP prevents individuals from getting unjustly enriched or unfairly harmed by their or by other’s acts of free riding. The greatest supporter of this view is Wendy Gordon. The challenge for this account relates to the definition of circumstances that constitute unjust enrichment. Gordon states that the circumstances must require the following:
Gordon’s account is remarkable in that it supports something else than property in the form of liability rules which permit for payment in case of unauthorized use of others’ intellectual products. The account of Gordon has the effect of protecting individuals’ freedom to use the intellectual products of others (without payment) in all cases except the one in which the user establishes commercial benefits of the product at the commercial expense of the creator.
These accounts of unfair competition are of great importance in Europe. The Court of Justice frequently emphasizes the principles of free movement and competition. Another IP law aspect which is well explained by the principles concerning unfair competition is the range of exceptions to copyright and patent infringement that EU legislation permits Member States to recognise. There also exists a strong connection between the European trade mark regime and the values of fair competition.
A central issue includes the establishment of the injustice of reaping when one has not sown, without relying on the harm inflicted by the reaping on the creators or third party users of the protected product.
This view on IP holds that IP is founded on the state’s instrumentalist commitment to establish results which reach beyond the vindication of the rights or interests of the creators of the intellectual products themselves, such as maximizing the general welfare of citizens or human happiness. These accounts of IP exist to discourage socially undesirable behaviour or to support socially desirable behaviour. These accounts are widely supported.
There are two key challenges concerning this utilitarian thinking:
The theories of instrumentalism on IP origin form a belief that deploying the states’ regulatory mechanisms to protect and recognize property concerning intellectual products will have advantages and will protect the public good. IP systems are engaged in the fine balancing exercise between the provision of incentives or disincentives on the one hand and considerations of distributive justice and social welfare on the other. Crucial in striking the right balance is the identification of the nature of the benefits.
Pluralistic theories of IP reject any ‘one size fits all’ theory, in preference of a view of IP systems which supports multiple moral and economic principles and values related to their diverse legal and social functions, including the varying beliefs of individuals concerning their proper conception and scope. The effect of pluralistic theories is the connection and embedding of the substantive IP rules in the basic values of the European community as expressed by the constitutive legal instruments. Pluralism encourages a view of IP as serving European citizens by the legal harmonization and integration initiatives of Europe.
In order to be identified as an intellectual product, the product should possess the following three essential features:
The common carrier is referred to as the person who advertises to the public that he is available for providing transportation of goods for a fee. The liability for a common carrier is to carry the cargo safely. Exceptions exist, but are limited. Exceptions include the ‘acts of God’ (natural causes), actions by ‘the Queen’s enemies’ and inherent vice. In these cases, the common carrier remains liable when he has been negligent and this contributed to the loss.
The duties of the carrier to the shipper imposed by common law are the following:
If a breach of a duty deprives the innocent party of the whole benefit of the contract, the innocent party is entitled to sue for damages and to treat the contract as ended. Any other breach of contract will only allow for an action in damages.
There are three common law exceptions to the carrier’s liability. Firstly, the carrier will not be held liable for losses which occur due to natural causes without the intervention of humans. Secondly, the carrier cannot be held liable for losses which resulted from acts committed by states or their subjects with whom the country is at war. This exception does not only cover the seizures of goods but also the losses caused by the deviations of the ship in order to avoid capture. The last exception is referred to as inherent vice, which comes down to inherent defects of a good for which the carrier cannot be held liable.
A long list of exemption clauses is typically included in the contract. These exemption clauses relieve the carrier from liability for occasioned losses by specified causes. It is only permitted to exempt the carrier from the absolute duty of a common carrier and not from the want of reasonable care, diligence and skill.
The following exemptions are considered to be the typical contractual exemptions:
The Hague Visby rules apply to a straight, consigned bill of lading. The Rules only apply to carriages between two different states. The incorporation of the Rules into the contracts of carriage is common, however it is crucial to determine whether this incorporation includes purely contractual effect, due to the engagement with s 1 (6). If not, the Rules will have force of law, therefore the provisions in the contract of carriage which are inconsistent with the Rules will be void. The contract of carriage must be for goods, wares, merchandise and articles of every kind, excluding live animals and cargo which according to the contract has to be carried on deck and is so carried.
The contract of carriage under the Hague Visby Rules covers the period of time between the moment when the goods are loaded and the moment that the goods are discharged from the ship. Art III rule 2 states that "the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried." The Hague Visby Rules apply to contracts which concern the carriage of goods by sea. Therefore, the Rules will cover tackle to tackle. This means that they apply from the time when the ship’s lifting gear engages with the cargo to the point when it disengages at the port of discharge.
There are exclusions to these rules, which consist of cases in which the carrier will not be held responsible.
The claimant must meet the following two main conditions if he is to make a claim against the carrier:
The maximum liability of the carrier concerning the goods is the higher of 666.67 units of account per package or two units of account per kilogramme of the gross weight of the foods lost or damaged. An exception applies if the value of the goods is declared to the carrier before shipment and is included in the bill of lading.
The common carrier is referred to as the person who advertises to the public that he is available for providing transportation of goods for a fee. The liability for a common carrier is to carry the cargo safely. Exceptions exist, but are limited. Exceptions include the ‘acts of God’ (natural causes), actions by ‘the Queen’s enemies’ and inherent vice. In these cases, the common carrier remains liable when he has been negligent and this contributed to the loss.
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