Thursday, 28 April 2011

ISCL 2011 in Dublin

I am heading to the Annual Conference of the Irish Society of Comparative Law (ISCL) tomorrow. If I have internet access, I may do some live-blogging on Saturday.
Annex: ok, it's Saturday 3.45pm, I am at the conference and to keep my live-blogging promise:
  • First of all, internet connection via Eduroam at University College Dublin (UCD) a bit shaky but it's good that they have it; yesterday I was at Trinity College Dublin and no Eduroam....
  • To respond to Twining, does the conference show that the "country & Western" perspective of comparative law is still predominant?
  • Well, yes, in general most papers are "Western" in focusing on the developed countries; exception: a good presentation by James Gallen (TCD)
  • The country-perspective is weakened: most papers have some EU and international law dimension (which is to be appreciated)
  • Something else: I just introduced myself to H. Patrick Glenn and his first comment was: "you published in the McGill Law Journal, didn't you?" It's good to be appreciated and it seems to show that even in the age of SSRN the branding of law journals can be quite useful (btw: the SSRN version of my McGill article is here).
  • Which leads to Glenn's presentation which was on Comparative Law and the Multi-Value Turn - quite interesting, based on ideas by Gabbay and Woods on The Many Valued and Nonmonotonic Turn in Logic.

Friday, 22 April 2011

Why are the French so rude? – or, how not to link law with culture

I have been reading an interview with Hernando de Soto, the famous (or infamous) supporter of rule of law projects in Latin America (available here). For instance, De Soto explains the relationship between legal rules, productivity and culture as follows:

If you look at an average American (…) you find that they are people constantly looking for productivity. By contrast, Latin Americans are mostly concerned with public relations. We’re much smoother than they are. We get appointed the Secretary General of the United Nations without any problems. We’re very kind and courteous and wordy in and outside of the airport: cómo está usted, qué gusto, cómo le va, bien gracias, cómo está usted su merced. We’re much more polite than they are because we need public relations. Most Americans, or Swiss, or Germans are just dedicated to their productivity. They aren’t as nice as we are because they focus on production. This phenomenon forces Latin America to preserve medieval habits: pre-industrial revolution habits, which are concerned with the cultivation of public relations, instead of following rules. As a result, both our formal sector and our informal sector are much poorer that those of the developed countries like the US.
So, apparently, it’s bad for a country if everyone is very friendly because it shows that people don’t follow the law and, as a result, the economy is struggling. There, I come to the title of this post. In a recent Guardian Poll (here) 5,000 people from five European countries were asked what they think about the other four countries. One of the results is that the Spanish are regarded as the friendliest people, then the Polish, Germans and British, and the least friendly people are the French (a surprise?). Thus, De Soto may say that this is presumably because the French have a good and well enforced legal system; so you don’t need to rely on personal relationships and friendliness to get what you want.
Is this just nonsense? Well, De Soto is right in that in principle law and customs can be substitutes, but that’s hardly the whole story. People may be friendly or unfriendly for all kinds of reasons not related to the law. Moreover, I would assume that there is an omitted variable that influences both law and friendliness: in a well-functioning and wealthy country laws may be better and people may actually be friendlier then elsewhere, thus, there would be a positive not a negative correlation.

Sunday, 17 April 2011

The Civil Law fights back … but is this useful?

Financial economists (notably La Porta et al) and the World Bank (notably its Doing Business Report) take the firm view that Common Law legal systems are superior to the Civil Law ones since empirical evidence (allegedly) shows that the former is more supportive to economic development than the latter one (for critical comments see e.g. here, here, and here).
Naturally, some Civil Law countries have not been happy with this claim. In France the Association Henri Capitant des Amis de La Culture Juridique Française (here) and a group on the Attractivité Economique du Droit (here) challenged these findings. And in Germany the associations of lawyers, judges and notaries have set up a website in order to promote German law (here) – apparently in reaction to an initiative by the Law Society of England and Wales on English law as the international law of choice (here).
Now a number of French and German associations, sponsored by their governments, have joined forces and produced a report on “Continental law: global • predictable • flexible • cost-effective” (French/English version here; German/English version here). This report contains a number of broad statements outlining the (alleged) superiority of the Civil Law over the Common Law:
Continental law is characterized by statutes and codification (…) Because of such codification, continental law is accessible (…) In common law countries, the search for the applicable law often requires consulting a long series of court decisions in order to find an appropriate precedent – if one even exists. (p. 4)
Continental law countries are characterized by the existence of a civil code that serves as the general framework for contract law. (…) Contrary to common law countries, the parties do not have to create their own rules for each contract; the contract only needs to stipulate clauses on issues on which the parties wish to exclude or supplement the rules of the Code. (p. 6)
[U]nder both French law and German law, the obligor can be required to perform a promised service and is not discharged simply by paying a sum of money. Common law, on the other hand, enshrines the opposite principle, providing that, as a general rule, a contractual breach is sanctioned solely by an award of damages. (p. 9)
The costs of proceedings before a German civil court (…) are not only significantly lower than in the common law system, but the fee schedule enables the parties to calculate the risk involved in litigation from the outset. In France, access to the courts is not subject to fees and the parties pay only the specific expenses and fees of the legal professionals who assist them. The cost of these professionals is much lower than that of their common law counterparts (pp. 19-20)
The courts in continental law countries are also required to explain the reasons for their decisions. In contrast, in common law countries, when jury trials are used, juries do not have to give the reasons for their decision. Continental legal systems have adopted a simplified and streamlined law of evidence, which, among other advantages, obviates the slow and costly pre-trial exchanges of evidence conducted under pre-trial discovery. (p. 22)
Specialized courts and lawyers, who are often also qualified in the relevant scientific or engineering field, guarantee effective protection of intellectual property rights (…).The costs of proceedings before the specialized German and French courts are much lower than those in common law countries. (p. 25)
Does this make any sense? Well, it appears to me that now the Civil Law is repeating the mistakes of the La Porta/World Bank research (i.e., two wrongs don’t make a right): many choices that legal systems can make have advantages and disadvantages (e.g., codification can provide legal certainty but it may also be inflexible; low costs of legal proceedings can guarantee effective enforcement but may also encourage frivolous litigation etc, etc.). So, eventually, it is often a matter of preferences whether a legal system favours one solution or the other one, making statements about “better-ness” fairly dubious.

Friday, 8 April 2011

The Protection of Creditors of a European Private Company (SPE)

A new joined paper with Leif Herzog and Erik Rosenhager, published in EBOR 2011 and the SSRN version is available here. The abstract reads:

Soon we can expect a new type of company: the European Private Company (Societas Privata Europaea – SPE) aimed at small and medium-sized enterprises in the EU. In this article, we analyse how creditors of future SPEs will be protected. In the first part, we identify on a general level how creditors can be protected. Then, we turn to the tools used in the different draft versions of an SPE statute (Commission Draft, EP Draft, Presidency Compromise). As these do not cover all aspects of creditor protection, the next part examines how these gaps ought to be filled. Subsequently, we discuss whether, from a normative perspective, creditor protection in the EU should be further harmonised. Overall, we conclude that what emerges is a mixed picture between various levels of European and national rules. This may not be ideal but it may be the price worth paying in order to reach political agreement on SPE law.