The importance of case law in the English Legal system: Commercial Law

The United Kingdom works on a legal system that functions solely on Constitutional conventions and other sources that do not have its origin solely on a legal base. The UK being a common law country depends highly on laws decided via cases which are known as Judge-made laws, or gives birth to the doctrine of Precedent. The Precedent or the judge made laws are collected subsequently over the years and finally functions as a rule for deciding cases that may arise in the future. Along with constitutional conventions, the Doctrine of Supremacy or Sovereignty which is basically laws enacted by the parliament might also gain privilege over Common laws. However, it can be well established that common laws are pivotal to the judicial system of the United Kingdom and therefore carries stark differences to other sources of law; Equity, Statute law, Special law or Civil law. The local laws that were well within the systems have been accepted and finally approved to be crystalized into one uniform law that may prevail all over the country. This term is very much in use which basically helps to draw a difference between the laws that are passed by the Parliament and the ones that are supported by the rule of law.

Needless to emphasize on the importance of judicial precedents that operates as a binding force and executes an authoritative implication on cases that may arise in the future having similar facts and histories. This also pulls out another doctrine which is similar in nature, also Known as, Stare Decisis, meaning, “Stand by the decision” giving absolute authority of a previously decided rule to apply and have a binding effect on newer cases.

The English Mercantile law is derived from mostly from The Common law along with the Equity, Statute Law or Case Laws and also the Merchant Law. The commercial law did take on to common laws especially when Lord Mansfield had become the Lord Chief Justice in the year 1756, he took matters in his hand where he tried and instilled a sense of certainty that was lacking within the functioning of commercial laws in general wherein he equated the customs that basically governed mercantile laws into direct customs, which would permeate the premises of Common laws. Malyens, a writer of seventeenth century has tried to convey that laws that govern commercial aspects are basically the long term practices of the merchants which is not transient and takes a different shape with time and delivers a newer structure and method, along with newer times.The story after the 1700s took a new turn wherein the case laws that engine the mercantile laws were confined and consolidated into four main legislations like the Bills of Exchange Act, 1882 , Partnerships Act, 1890, Factory Acts, 1833 and Sales of Goods Act, 1893 A constant need to integrate the customs into working mercantile law and the judgments so derived was seen by Lord Mansfield which was to ensure a binding effect on the rules so formed ready to be applied on other instances as well. To be a part of a well formed precedent the customs needed to fit in a few attributes which would pass the test of antiquity as well as could be applied locally , being in practice immemorially also was later considered as the law of land hence reflected and bound all the people of the land , only then could a custom be integrated judicially into a law.

In a particular case of Lewis v. Rucker, 1761, the cases had to be sent to Common law courts but it came to terms with unrequired delays, longer procedures therefore failing to uphold the required limits of transaction shifting the practice on to special courts that were formed by 1892 and by 1895 Queen’s Division Bench took notice of the lists formed through Commercial laws.

The case of Vallejo v. Wheeler duly exhibited the evolution of Commercial laws wherein certainty was a valuable question that was raised and as accepted and put forward by Lord Mansfield that, any trader involved in a business trade walks on a tight rope of grounds already established and the quotient of uncertainty would shake their ground , therefore a rule that is formed must be stable and certain, helping the traders to jump in times of need blindly.. Here, we must draw the chain of rules where this particular ratio that was devised was further seen in cases like Jindal Iron and Steel Co Ltd case and Golden Strait Corporation case (‘The Golden Victory’). This could solidify the concept that the Highest Court of Authority bites on rules laid down by them bridging the gap between prevalent customs as well as the application of judicial mind and enacted laws.

In the case of Lee v. Lewis an instance of practice being developed into laws was witnessed in the question of settling foreign bills which entailed a practice giving a leeway of three days until payment. Also, much of the conversion and consolidation was witnessed in the late 18th and 19th centuries wherein law digests saw its presence in Bill of Exchange Act, 1882 formulated by Sir Mackenzie Chalmers, a direct shift from the practices taken up by traders. A decision in the case of Lickbarrow v. Mason was also deemed historic since undertaken by a jury specially, saw the titles were given to Cargos along with handing over of the Bill.

With respect of Bill of Lading, the law primarily intervened to close latent defects identified in Leigh & Sillavan v The Aliakmon Shipping Company Ltd, (The Aliakmon) when put before the House of Lords, despite of a negligent action of a carrier , all liabilities were somehow escaped proving a great deal of defect which was rectified by the Carriage of Goods by Sea Act, 1992 which was as a result of the repeal of the Bills of Lading Act, 1855

The practices have also been incorporated taking up core customary ordeals into the laws of letters of credit mostly by Uniform customs and practices in many cases but has been highlighted through the case of Royal Bank of Scotland, the commercial developments have been ascertained by judgments undertaken following the Uniform Customs and Practices in the year of 1933 by the ICC. This legislations governing letters of credit are substantial in the performance and regulation of International law mostly because it confirms with the practices in place along with the non-interference of legal principles within the area. This really helps the international law sail smoothly and gives a blanket security to the business laws.

“The Common law is not bureaucratic” was observed in the case of Kum v Wat Tat Bank Ltd, 1971 by Lord Devlin which reserving faith in traders by applying the thought that it is optional for traders to take their own path of conducting business and no guided proformas are required in the manner, therefore helping them trade freely with suitable limitations.

It is undisputed that the English Law is more referred to in the regulation of commercial laws and most sought after in the world, a part grandly played by the judiciary. New laws pertaining to the commercial or business laws were creamed out from existing practices and continued performance of custom. The inter-relationship carved out by the Highest authorities have stood well with the enacted laws resorting to other modes of dispute resolution being Mediation, Arbitration and Alternative Dispute Resolution. The journey of the amalgamation of practices conducive to common sensibilities along with legal implications formed along the way has ensured a tightened rope for traders delving in business activities.

Continue your exploration of The Debate Over Corporate Social Responsibility: Reevaluating Milton Friedman's Profit-Centric Perspective with our related content.

STATUTES:

1. Bill of Exchange Act, 1882

2. Carriage of Goods by Sea Act., 1925

3. Partnerships Act, 1890,

4. Factory Acts, 1833

ARTICLES:

1. Legal systems in the UK (England and Wales): overview”, Serle Court, Professor Suzanne Rab

2. Case Law in England and America, 15 Cornell L. Rev. 173 (1930), Arthur L. Goodhart http://scholarship.law.cornell.edu/clr/vol15/iss2/1

3. Sources of Business law, New Horizon college,

4. http://newhorizonindia.edu/nhc_kasturinagar/wp-content/uploads/2018/02/CHAPTER-1- Introduction-to-business-law-1.pdf

5. Lord Irvine, May 2001, “The Law: An Engine for Trade”, THE MODERN LAW REVIEW Vol 64, NO.3

CASE LAWS

1. Vallejo v. Wheeler (1774) 1 Cowp 143

2. Kum v Wat Tat Bank Ltd, 1971, 1971 [1971] AC 439, [1971] 1 Lloyd’s Rep 439

3. Royal Bank of Scotland v Cassa di Riparmio delle Provincie Lombard [1992] 1 Bank LR 251 at 256

4. Leigh & Sillavan v The Aliakmon Shipping Company Ltd, The Aliakmon [1986] AC 785

5. Lickbarrow v. Mason 1788), 2 T. R. 63 and (1794) 5 TR 683

6. Tassel and Lee v. Lewis ( 1695) 1 Ld Raym 743.

7. Golden Strait Corporation v Nippon Yusen Kubishka Kaisha (‘The Golden Victory) [2007] UKHL 12

8. Jindal Iron and Steel Co Ltd and others v Islamic Solidarity Shipping Company Jordan HL (Bailii, [2004] UKHL 49, House of Lords, Times 26-Nov-04, [2005] 1 WLR 1363, [2005] 1 All ER 175)

9. Lewis v. Rucker, 1761 1695) 1 Ld Raym 743