As an international business attorney, it’s not unusual for a client to ask me what the difference is between civil law and common law. It’s always a great question and lets me know that they’re engaged and invested in the legal process. This is so whether I’m dealing with a transaction or a dispute.
It’s a great question because the differences between the two legal systems not only impact how business is done, but also how other business people and their lawyers think. For example, an English solicitor may advise you that you have a very solid and strong case under English Law, whereas a French lawyer might say of the same case, that it appears good ‘but you never know what will happen on the day’.
The Basic Difference Between the Two Systems
- Civil Law: A Civil Law country has a body of law (passed by Parliament) that can be referred to in each individual case and there is no such thing as binding precedent. It is the most prevalent and oldest surviving legal system in the world and is found in continental Europe, much of Latin America and in parts of Asia and Africa.
- Common Law: In Common Law systems the law continually evolves in addition to being amended by laws passed by the legislature. If a higher court has previously interpreted a statute in a particular law this cannot be overridden by a lower court – the decision of the higher court is a binding precedent.
Common law legal systems are in use in England where it originated, and in nations that trace their legal heritage to England as former colonies of the British Empire, including the United States, Singapore, Pakistan, India, Ghana, Cameroon, Canada, Ireland, New Zealand, South Africa, Hong Kong and Australia
Here’s an Example:
In the U.S. (except Louisiana), if you want to know what the law is, you check the statutes, rules and regulations. But you also need to review how these laws have been interpreted and applied by reviewing past legal cases.
Under the Civil Code your inquiry stops with the statutes, rules and regulation – the Civil Code itself. Forget about creative interpretations of the law, or complying with the spirit of the law rather than the letter of the law.
If the Civil Code says that you need to do X, you need to do X. There is no room for making analogical arguments, such as since doing Y would have the same result as doing X, it should be okay – and perfectly legal – to do Y rather than X. You might as well stop the analysis, and get ready to follow the letter of the law exactly, even if you can think of a hundred different and perhaps better ways to accomplish the same thing.
Pros and Cons
The benefit of a common law system is that you can be confident of what will happen in your case if a similar case has been heard before. The drawback is that if you have an unusual case, there is nothing to stop a judge creating a new law and applying it to your case.
The benefit of a civil law system is that you can only be judged by the laws which were actually written down in front of you at the time. The drawback is that even if previous cases show you should win your case, there is no guarantee a judge will interpret the code in the same way on your case.
Although the distinction between the two systems is a basic tenet of international law, their different legal approaches should be factored into every major international business decision that is made.