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Topic 1-2 - Common Law

Introduction to Common Law (Universitat Pompeu Fabra)

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PART I. GENERAL

TOPIC 1 AND 2. AN INTRODUCTION TO THE UNITED STATES AND THE UK

LEGAL SYSTEMS

T1. The classification of legal systems into legal families. Criteria used to classify legal systems. Common Law, Civil Law and
mixed or hybrid legal systems.

T2. Origins of the Common Law. Common law vs. civil law legal systems: sources of law, principle of precedents and doctrine of
stare decisis, method of legal thinking and finding of justice, inquisitorial versus adversarial proceedings. Overview of the Unites
States and the UK Court systems.

Legal opinion  document written by a professional lawyer where he/she states if a contract is valid and proposes a
course of action (what can be done and what the choices are). In English law, legal opinions are very important: lawyers
can be found liable if the legal opinion is incorrect (that’s why lawyers have insurances).
- Is the contract valid?
- What course of actions can the Spanish company take?
Regarding the translation of legal terms, we need to take into account that in the world there are two large legal
traditions:
- Civil law  it started with Roman law and was developed following Roman law (Spanish and Catalan law).
- Common Law  it is influenced by civil law, but there are major differences. Many English legal terms do not
have and exact match in civil law, for example: contract has different meanings in civil and common law.
CIVIL LAW TRADITION
Law develop as a separate object of study for the first time in the western world with the romans who were the first
who studied law as a different science (separate of every other branch of knowledge).
The main rules/books of Roman law were taken in an encyclopedia of the 6th century A.D. sponsored by Justinian. This
encyclopedia was taught in the 12th century in the north Italy: some teachers offered lessons based on this
encyclopedia and this was the beginning of universities  most cultures in Europe started to replicate what was being
done in the north of Italy and started to teach Roman law in universities too.
 This means that most of the lawyers in Western Europe studied Roman law in university and used Roman law to
solve the problems in their course. Judges started to apply Roman law because lawyers based their arguments in
Roman law. However, a part of that law was common: (law how Justinian had recompiled it), most countries had
also their specific law.
In the 19th century, in some countries the law was compiled in a Code: it is not just a compilation, it’s a law that follows
the tradition but also introduces some changes  its aim was to have the law written in the language of the country
because it was difficult to follow all the rules due to they were written in Latin, so the lawyers wrote the main rules of
the law in different languages (Spanish, German…). This tradition was common in most of the European countries. But
in England a completely tradition developed: common law.
Summary:

- Based on Roman law.

o As complied by Justinian in the 6th century.
o Taught in universities in the 12th century.
- It’s considered a science  it can be studied as other sciences like philosophy, physics…
- Most principles of the law are to be found in a Code.

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COMMON LAW TRADITION

The main features of this tradition are:
1. Is based on precedent, not on a Code  in common law jurisdictions, they don’t use a Code (neither Justinian’s
encyclopedia); so you have to find the law by looking to similar cases that have been decided in the past
(precedent). Essentially, what common law lawyers do when they have to solve a problem, is search what
judges have decided before: however, it’s really difficult to find an exact case, so they find similar cases and
they have to evaluate if the principals behind the court decision are applicable at their case.
2. In common law countries the law is not considered a science: this means that you can’t find the law by
applying scientific methods  law is taught in universities, but it isn’t considered as a science that can be
studied separately of the other subjects of knowledge and that’s why law was a more practical: the university
taught the students how to be a lawyer. So study law is learning how to be a lawyer. That’s why books are
published by university professors: if you want to know the law you have to go to what professors have
discovered.
Common law was expended to most of the English countries, so now we have laws based on Common law not only in
England and Wales but also in USA, Australia, New Zeeland… There are some countries influenced by both of them,
like Japan (which has chosen Civil law tradition).
Summary:

- Based in English legal experience.

- It’s a technique (practical skill).
- The principles of the law are to be found in precedents.

Common law tradition/jurisdiction is two legal traditions or sets of rules:

1. Common law: general to Common Law States (legal remedy)  Common law was developed in English courts.
Starting in the 10th/11th century, England had one of the first political organization in Europe that had
centralized courts: you could go to the King’s Court of Justice where you could explain your case.
o The King’s Court did a writ (order to act by the Court) which was notify to the other party and he could
challenge the writ if he thought it was wrong.
o In most cases, the final decision was made by a jury.
o The law developed in this Courts tends to be very formal: if you execute a writ but with some mistake,
it was considered incorrect (any mistake could prevent justice to be done). So in some cases it was
difficult to go beyond the out appearance of the situation.
2. Equity: specific part of the law (equitable remedy)  in the 15th century, some people thought that the King’s
Court was too formal so they wrote a letter to the Chancellor saying that they couldn’t find remedies in Court.
o With this they avoid the King’s Court creating a parallel system of justice: Equity Courts.
o This system is much more flexible: it usually focuses in the intention of the parties.
o Equity isn’t a system that can stand alone: it needs the law  it develops and amends Common law:
the rules used in Equity system are based on previous common law rules.
 Example – specific performance  in common law courts, if you are bound by the obligation
to do something and you don’t do it, the judge cannot force you to do that obligation, he only
can sentence you to pay damages; but in some cases this don’t do justice, so equity courts
allow specific performance: the court can force you to do a specific action.
o In the late 19th century both tradition got together, so nowadays we have one tradition. However,
courts solve the cases according common law or equity, so if you want that your case is solved with
equity, you need to go to the court and say that you want your case solved based in equity.
o Features:

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 Discretional  you have to convince the court that the usual rules on common law are not
doing justice on your case so it needs a special protection (you have to go with clean hands).
 Trust: main device used by Equity  trust do not exist in civil law jurisdiction unless it has
been imported.
 A trust is a structure where you have 3 parties: settlor, trustee and beneficiary.
 This device was born to protect minors: if a person had minor children, if he dies there
was the fear that the minors could not administrate the property properly  the
settlor (the person who has the children) transfers the property to the trustee
(another person), who has to follow the instructions received from the settlor and if
not, he would be in breach of trust. In the end, the trustee has to transfer the property
to the beneficiary (minor).
 According to Common Law, the legal owner of the property is the trustee. So if there
wasn’t equity, the trustee could sell the property and not transfer it to the beneficiary:
with Equity beneficiaries can force the trustee to follow the instructions of the settlor.
In the other hand, the trustee is interested in the application of Common law.
 English law gives much more freedom to the settlor when it comes to the instructions
given by him to the trustee.
 One of the uses of trust that is not ethical and correct is use it as a way to hide the
ownership of a property.
o Usually when the settlor and the beneficiary is the same person or there’s no
beneficiary.
o Application of a look-through trust.
 Equity Courts can declare the existence of a trust that has not been expressly created
by the parties.
As said it’s impossible to find the law only looking to equity. To find the law we need to, in the first place, find
precedents  in common law jurisdiction precedents are binding: lower courts must follow the precedent set by
upper courts.
- In Spain, lower courts can differ from the precedents established by the Supreme Court: precedents aren’t
binding in Spain  the judge that does not follow the precedents isn’t acting against the law.
- This phenomenon it’s stare decisis  you have to stick to what has been decided.
- Court decisions treats different points of the low, but they are only binding regarding to the principles and
rules used to solve the case  ratio decidendi: grounds of the decision.
o This is why some cases are very quoted, but it is very difficult to find the entire decision: what is
important are the principles.
o Obita dicta  what is said marginally.
If the law is found in precedents, what do Parliaments do? As known people don’t chose the judges, but they elect
parliaments. Parliaments pass acts (leyes aprox.).
- Law in most cases is referred to “derecho”.
- If there’s a conflict between precedent and act, the act always prevails  the act is approved by the
Parliament, which has been elected by the people.
- Some people have said that acts are documents setting by a precedent that is not linked to a specific case.
o In domestic contracts, the parties very often exclude the application on the contract (Rights of third
parties – Act 1999).
o In England, acts are very detailed and long  essentially, they are trying to include all the possible
scenarios (they want to include all the precedents in only one act).
- Essentially, most of the acts summarizes the already existing principles applicable (precedents). But in some
cases, they change some rules.
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CASE – Peter owns a farm and has a cousin and doesn’t have children neither spouse. His cousin has a son called David.
For more than 30 years, David worked very hard (18h in a row) in Peter’s farm and he didn’t get any money for that.
David worked for his uncle in this conditions because Peter let David understand that, when he dies, he was going to
give him the farm: Peter gave David instructions regarding what to do with the farm, how take care of it…
Court: “The owl of Minerva spreads its wings only with the falling of the dusk”  this means that you learn what is
important when it is too late.
David discovered that his uncle never made a will so, when he died, David’s father inherited all Pater’s goods (including
the farm)  David went to a lawyer for advice: David must go through the law and then equity.
- Legal remedy: it was the first step to take, but he didn’t take it because he didn’t have probabilities to prevail
 between Peter and David there’s no contract, therefore there’s no breach of contract, because it doesn’t
follow the formalities required by Property Law act: all contracts regarding land must necessarily be in writing
and also every contract, which is not a deed, needs a consideration (contraprestación).
- Equitable remedy: there were some remedies that could be claimed, but he didn’t want a specific one, so
David asked his lawyer to claim a remedy as general as possible. One of the main choices of the Court is
estoppel: main choice judges deal with  it has to do with the problem of consideration: sometimes we make
promises to people without consideration, if you don’t comply the promise you don’t breach a contract
(because there isn’t a consideration), but in most cases the other person relies in the promise made and acts
based in it.
We see that this situation is unfair so this remedy was created  if there’s a promise (not formalized as a
deed) and a reliance in it, if the promisor detriments, Equity Courts will protect the person who relied in the
promise: the easiest way to do this is to make the promiser pay the amount of money equivalent to the lost
that the other person has suffered.
 In this case, David doesn’t want the money, he wants the farm: Is it possible? To answer this, we need to
remember the concept of trust: courts may declare the existence of trust or create it.
David knows that the court cannot declare that he is the legal owner of the farm (there’s no contract nor
transfer of property); however, it would be beneficial for David that the court conceives that there’s a
trust in which the beneficiary is David and the trustee is Peter’s cousin (David’s father)  so, can the Court
declare a trust based on estoppel?
o To determine this, we need to find precedents: Crabb vs. Aron District Council (8), Ramsden vs.
Dyson (8) and Cobbe vs. Yeoman’s Row Management Ltd (26).
o In the 2 first cases, the Court declared the trust, but in the Cobbe case the court did not  we need
to look to the reasons in every case and determine if this case is more similar to the ones where
the trust is declared or to the one where is not.
 Crabb vs. Aron District Council  Crabb sold a piece of land, with has the entrance to the
house and the City Council doesn’t have any contract with him, so he couldn’t use the other
entrance. The Council intention was to let him use the entrance to the house, because it was
a clear promise. The entrance wouldn’t have been built in that place instead. Crabb hasn’t got
any other way to enter to his house. The Court decided to create a Trust. The Council is the
trustee because he is the legal owner of the property, but Crabb has a right of way in order to
enter to his house.
 Ramsden vs. Dyson  A and B are neighbors. B build his house in A’s property. A part of his
house stands on A’s property, so A he asked B to put it down. The trustee is A, who holds the
legal owner of this block, which is held on trust to B. B is the beneficiary. There are all the
elements of estoppel promise, reliance and detriment. A said that there was no problem on
taking a little part of the land. Can exist a temporary owner of the land.

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 Cobbe vs. Yeoman’s Row Management Ltd Yoeman’s Row Company owns a land and Cobbe
wants to develop it so he asks it to the company and states that he will go to the Council to
submit an application to do it. The company agrees but says that doesn’t want to sign any
contract. Cobbe spends money to cover the expenses of the permission. Before the
permission was granted, the owner of the land decided that they want to sell the land to
someone else without notifying Cobbe because they wanted the permission to build so they
could sell the property for more money. When the City Council gave the permission, the
company sold the land and Cobbe sued them: he was interested in that the Court declare that
the owner of the land was holding it in trust for Cobbe; but the Court stated its disagreement:
we are not dealing with two neighbors or relatives, we are dealing with businessmen which
are negotiating in a context where the parties don’t take into account the other party’s
interests so Cobbe knew that he was taking a huge risk by acting without a contract signed by
the company and, as a businessmen, he needed to deal with the risk taken. That’s why the
Court declare that there wasn’t trust in this case.
o Lord Scott of Foscote disagrees with the Court opinion  it’s not a case similar to Crabb vs. Aron
District Council, because Peter hadn’t built anything. He defends the idea that here we have a
constructive trust: trust that has been created intentionally by the parties but they did not document
the terms of the trust in paper. In this cases, the Court doesn’t have to create the trust based on
estoppel so it doesn’t have to prove the requirements of estoppel, it has to prove that there is the
intention of the parties to create the trust.

Case – boy and a girl (couple) intend to marry. The boy has a house but it needs to be reformed. The girl decides to
help the boy to reform the house. For 1 year they work in the house every weekend (16h). After the year, when the
house was ready to move in, the boy dumped the girl. The girl goes to a lawyer because she wants a compensation.

 Estoppel  constructive trust: there’s reliance in the fact that the girl would get an interest in the house and
was promised to share some right on the house. She lost her money and time. A Court can provide a remedy
to prove that the boy is holding a part of the house in trust for the girl: the boy is the legal owner, but the girl
can hold the legal ownership in trust for a proportional part based in the money and time spend in the house
(she will be the beneficiary of the trust). The Court isn’t imposing a trust but finding the will of the parties to
maintain this type of relation. The usually will be pay some amount of money to compensate the girl’s work
and investment, but this amount would be very large (quantum meruit: as much as it’s worth).
 Spanish CC  breach of the marriage promise: the boy broke the promise of marriage so the SCC establishes
that he has to compensate the expenses that arises from this.
 CCCat  property law: if you build in someone’s land you lose your investments if you act in bad faith
(knowing that you are not entitled to build in it); also, you must compensate the owner for the damages
caused.
If the boy was acting in bad faith too, the bad faith of the girl is compensated and we see it as if both of them
acted in good faith  the girl would be entitled to keep her investments in the boy’s land.
*Good and bad faith are very important in the continental systems, but not in common law: good and bad faith are
concepts that exist in common law but aren’t as important as in continental law where they are the back bone of the
law and the base of contractual law.

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