Common law versus civil law

Thanks to Ken Parish for sending me a link to this (pdf) article on Gordon Tullock’s critique of common law. As I read the article I was respectively irritated, pleased and then irritated again. But it’s a good and interesting article. My irritation comes from the Procrustean manner in which so much modern scholarship proceeds. If the author is an economist, and they’re analysing a phenomenon in another domain – in this case law – little effort is made to build a way of appreciating the material to some extent in its own terms.

So the analysis of law becomes an analysis of self interested rent seeking by lawyers. Well there’s nothing wrong with that – there’s a fair bit of it around. Even so, each profession contains its own procedures and its own ethics. If Gordon Tullock is just a rent seeking academic – as to some extent he would encourage us to see him – we could safely ignore his article as being written without any attempt to make it a ‘good’ article. In fact I assume Gordon Tullock is trying to write a good article, just as a lawyer is trying to do a good job as a lawyer. But of course self interest does come into it. And in any disciplinary and/or commercial context (and with lawyers the both combine in a legal case) lawyers try to be good lawyers according to the ethos of their profession (stated and unstated) and they are also self interested actors.

Anyway, this is a long winded way of suggesting that I wasn’t looking forward to the analysis of lawyers as pure or simple rent seekers. They’re situated self interested actors and that situation consists not just of some economic incentives – important as they are – but also disciplinary expectations, requirements and exigencies. These are simply ignored. The result is pretty hit and miss.

Be that as it may, I found that Tullock’s Procrustean schema works very well when it comes to comparing the adversarial and inquisitorial forms of legal procedure:

In the adversary proceedings, a great deal of the resources are put in by someone who is attempting to mislead. Assume, for example, that in the average American court case, 45 percent of the total resources are invested by each side and 10 percent by the government in providing the actual decision-making apparatus. This would mean that 55 percent of the resources used in the court are aimed at achieving the correct result, and 45 percent at reaching an incorrect result. Under the inquisitorial system, assume that 90 percent of the resources are put up by the government which hires a competent board of judges (who then carry on an essentially independent investigation) and only 5 percent by each of the parties. Under these circumstances, 95 percent of the resources are contributed by people who are tempting to reach the correct conclusion, and only 5 percent by the saboteur. Normally we would anticipate a higher degree of accuracy with the second type than with the first.

There’s actually a lot that this misses. Most particularly legal procedure is such a many faceted thing and so much hangs on legal procedures that a delay of a week or so for the convenience of the lawyers may mean vast sums are squandered out in the world waiting for the adjudication. And so much that’s unnecessary can be nipped in the bud by the independent arbiter indicating that he thinks a particular line of inquiry is not likely to be sufficiently persuasive to be proceeded with. In the adversarial system huge amounts of resources can be spent preparing for a line of argument or evidence that might be ruled out fairly quickly at the trial.

Even so, the basic ideas in Tullock’s model are so simple that I think they capture the essence or an essence of the inefficiency of adversarial systems of arbitration.

The article then talks about Tullock’s hostility to common law means of reasoning – it’s inductive way of proceeding in argument. You can read the article on that if you like, but like the author, I find Tullock’s arguments unconvincing. There’s something very appealingly empiricist about common law reasoning, to me anyway. The principles of common law method as we know them emerged as British science and British empiricist philosophy emerged in the seventeenth and eighteenth century. One stands on the shoulders of a few giants (and a lot of pygmies) that have gone before one and one tries to use their reasoning to help you answer the case before you – using some principles of precedent which are both pretty commonsensical and quite helpful as heuristics.

I think common law reasoning gives common law systems a bias towards freedom, towards presuming against policy interference by the state. Common law reasoning is suspicious of grand principles of policy, and when faced with some gap in the law, seeks by way of generalisation and induction (sometimes a fiction of course) to divine the customs of the land from which comes the law. As someone with a high regard for Hayek’s warnings about the problems of central planning, and of the perils of policy more generally, I like this inductive approach.

I can’t prove this, because I’ve not investigated it, but when I did an inquiry into packaging with the PC over ten years ago, it struck me that the common law countries tried to be pragmatic around solving the problems of packaging waste. Tackling externalities and so on. But they stopped short of imposing grand principles like a ‘hierarchy of waste’ in which reuse is always better than recycling and recycling is always better than disposal which is an appealing but basically misguided idea. But these ideas were all the rage in Europe. So too was the grand principle of ‘extended producer responsibility‘. Again, it sounds great and environmentalists love it, but it’s often just mischievous. As a result of extended producer responsibilty the Australian wool industry had to work out a way of recycling or taking back the bales it sent its wool to Europe in! I kid you not!

Now while these regimes are often legislatively based, I think the legislative mind set from which they come is part of the civil law tradition – which encourages the idea that law emanates from the top down, whereas the motivating fiction in the common law is the obverse of this – that the law declared in a court is simply a ‘discovery’ of the customs of the people. In this context I’m more comfortable with the more passive inductivism implied by common law jurisprudence augmented by any edicts from the Parliament that turn up in legislation, than I am with the more general top down reasoning of the civil law system.

So in conclusion I’ve made a little quadrant to summarise the positions. I’m for the bottom left quadrant. Tullock is for the bottom right quadrant.

Inductive Deductive
Adversarial Common Law
Inquisitorial Civil Law

But if you’re a QC or even a more lowly private legal practitioner, chances are you’ll rather fancy being somewhere in the top two quadrants. Countries with adversarial systems spend much more on private lawyers. There are more of them. And they’re paid a lot more.

There’s another thing that this doesn’t capture and which is not discussed in the article, and that’s that in civil law countries, being a magistrate or judge is regarded as an essentially different legal activity to being an advocate. The upshot of this is that there’s a stream of legal education and promotion through which you learn to be a judge. No doubt being closer to our own system I’m more aware of its shortcomings, but at least in principle the civil law system seems a lot better to me. The idea that a great advocate will make a great judge strikes me as odd. Of course to some extent these things come out in the wash. A great advocate is likely to be bright and that will carry over to their judging, but there’s also a sense in which work as an advocate is regarded as preparation and training for work as a judge. While it’s probably a good idea for judges to have some experience of the advocate’s task, it’s better it seems to me for them to have as much experience and education as possible to equip them for their task as a judge. Advocacy is about picking the best parts of an argument for your side rather than the job of understanding both sides and judging between them. And it’s also about a certain kind of constrained creativity, which can be exercised by an advocate, but which in my experience is not nearly as highly prized within advocacy as it should be prized within judicial lawmaking. One cannot imagine advocacy being a particularly good preparation for kind of creativity Lord Atkin showed in Donoghue v Stevenson for instance.

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Anthony
Anthony
13 years ago

Interesying, because Tullock seems to be going against the general drift of other economists in the finance field who keep producing srticle suggesting that, from a corproate governance and financial markets point of view, common law countries are superior to civil law countries and keep hammering home that developing economies (such as those caught up i nthe Asian financial crisis) could solve all their problems by adoptin common law approaches: juries, ex post adjudication, less ex ante regualtion etc etc

“If Gordon Tullock is just a rent seeking academic – as to some extent he would encourage us to see him…”

Yes, as Daniel Davies has commented in the past, classical economists and evolutionary psychologists are examples of people who you can insult basically by affirming their arguments. Eg, “you just say that because you’re paid to say that” or “you just say that because you think it will gain you status”

Sinclair Davidson
13 years ago

There does seem to be a hostility to the common law in some parts of the GMU school. I started reading some of their civil law v common law literature several years ago and got too annoyed too quickly (I suspect) and stopped. At one stage I wasn’t sure if they meant civil law (as in Europe and evolved from Roman law) or civil law as in legislation. As Anthony says the empirical evidence does not support the civil law notion (see Andrei Shleifer from Harvard on this – ignore the other problems in his life, he is a fine academic). That literature has come under attack in recent times as having a misspecification error (the old causation or corrleation argument).

In one of Hayek’s later works (I think LLL) he talks about how his views changed about the efficiency of common law v civil after returning to Europe. He had thought civil law to be prefereable but changed his mind to prefer the common law.

Sinclair Davidson
13 years ago

The Hayek ref is to LLL I pg 116.

Some other literature worth looking at (* particularly good, IMHO):

*Barzel, Y. 1997. Economic analysis of property rights. Second Edition. Cambridge: Cambridge University Press.
David, R. and J. Brierley. 1985. Major legal systems in the world today: An introduction to the comparative study of law. London: Stevens and Sons.
*Ellickson, R. 1989. A hypothesis of wealth-maximizing norms: Evidence from the whaling industry. Journal of Law, Economics, and Organisation. 5(1). In S. Masten. (ed) (1996) Case studies in contracting and organisation. New York: Oxford University Press.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer and R. Vishny, 1997. Legal determinants of external finance, The Journal of Finance. 52(3), 1131-1150.
*La Porta, R., F. Lopez-de-Silanes, A. Shleifer and R. Vishny, 1998. Law and finance. Journal of Political Economy. 106: 1113-1155.
Merryman, J. 1985. The civil law tradition: An introduction to the legal systems of Western Europe and Latin America. Second edition. Stanford: Stanford University Press.
Posner, R. 1983. The economics of justice. Cambridge, Mass.: Harvard University Press.
Posner, R. 1995. Overcoming law. Cambridge, Mass.: Harvard University Press.
*Posner, R. 1998 Economic analysis of law. Fifth edition. New York: Aspen Law & Business.
*Ramseyer. M. and E. Rasmusen. 1997. Judicial independence in a civil law regime: The evidence from Japan. Journal of Law, Economics and Organization. 13(2): 259-286.
Zweigert, K. and H. Kotz. 1998. An introduction to comparative law. Oxford: Clarendon Press.

Patrick
Patrick
13 years ago

One cannot imagine advocacy being a particularly good preparation for kind of creativity Lord Atkin showed in Donoghue v Stevenson for instance.

I have no idea why not. I can imagine it, quite easily – good advocacy requires enormous creativity as well as perspicacity, intelligence, formidable memory and mental discipline. Sounds like great training for a judge!

I think the first issue civil law proponents have to address is why are they so unpopular? Something like 70 per cent of Europe’s financing passes through London, which is also the defacto shipping law capital of the world. Major European bankruptcies are also increasingly decided in London – the BCCI saga was an example of why – especially since new European legislation on the conflict of laws in bankruptcy.

Another issue is that it seems, on the face of it, absurdly naive to say this:

Under the inquisitorial system, assume that 90 percent of the resources are put up by the government which hires a competent board of judges (who then carry on an essentially independent investigation) and only 5 percent by each of the parties. Under these circumstances, 95 percent of the resources are contributed by people who are tempting to reach the correct conclusion, and only 5 percent by the saboteur. Normally we would anticipate a higher degree of accuracy with the second type than with the first.

Does anyone really believe this? Essentially this goes to the heart of the debate about central planning v free markets, as you suggest later on. The major point is that, in criminal cases, obviously you would rather be in an equally sophisticated common law country, irrespective of either system’s superiority at finding ‘truth’; in a commercial matter, where there is a high degree of actual choice, people do prefer common law countries.

So what are they missing given the apparent academic superiority of civil law courts? Bankruptcy provides an example – civil law systems generally regard bankruptcy as a quasi-criminal event with essentially the confiscation of the assets and a state-ran winding up, whilst every sophisticated common law system provides for numerous degrees of bankruptcy almost all of which are substantially ran by the affected parties themselves and many of which provide for the parties to agree to make sacrifices in exchange for a the possible continuation of the business.

A final example is equity. This body of doctrines is not wholly absent in the civil law. But the idea of trusts, and variations thereof as common as the charge over assets, are largely absent in the civil law. Similarly with the idea of ‘tracing’ unjustly received money through several recipients, which depends on the idea of a trust to operate. This also helps explain the popularity of the English courts.

None of this should be to to say that the civil law is uniformly worse or that the common law is the epitome of goodness. One counter-example is the popularity of Dutch (civil law) commercial arbitration – which combines tight civil law timelines and costs with relatively greater freedom for the parties to agree on what to actually discuss. And it goes without saying that our system could improve – just not often by copying theirs.

SJ
SJ
13 years ago

…in doing the legal degree I did…

I keep underestimating you Nick, even though my estimate is already pretty high. :)

Some interesting thoughts on the subject from Kirby on the history and possible convergence of the two systems.

SJ
SJ
13 years ago

One cannot imagine advocacy being a particularly good preparation for kind of creativity Lord Atkin showed in Donoghue v Stevenson for instance.

I’ll agree with Patrick here that this is actually easily imaginable.

I spent a couple of years in daily contact with a half a dozen or so QCs and SCs. It’s wrong to assume that they don’t have normative positions on things. The system is inherently conservative, though, so those normative positions are only allowed through very rarely. The legislature could short-circuit the process at any time if it chose to, and it’s only in circumstances where the legislature fails to act on an obvious problem where Donoghue v Stevenson judgments occur.

The QCs and SCs that I’ve met seemed to me to be excellent academics.

SJ
SJ
13 years ago

But in so far as you get a training, being an advocate is just good for teaching you familiarity with the law.

How is that different from any other profession or discipline?

But it doesnt give you lots of experience and encourage you to think about how to be a good judge – or even what makes a good judge.

You have an unstated (or perhaps implied) normative position on what makes a good judge. It might help if you spelled this out.

Patrick
Patrick
13 years ago

Senior lawyers spend half their lives observing the top judges – presumably this counts for something???

And have you ever read civil law judgements? One of the perversities of that system is that lower court judgements appear designed not to let you work out on what basis they decided the case – merely: alinea X of part VI of statute Gobblededook says this and in this case that governs the present dispute. Accordingly, X.

Appeal (ie Cour de Cassation in France, ECJ) judgements are often better – but I suspect if you try actually reading them, you would find them infinitely less satisfying than boring long-winded common law judgments. Ie, imagine a massively important conflict-of-laws judgement that barely mentions the residence of the parties and does not at all discuss the practical facts – one could feel shortchanged, or alternatively that European administrative judges simply don’t understand conflict of laws (this was both the British and French views, before you accuse me of bias).

Finally, I didn’t grasp at first reading your focus on procedure. Here, the issue is one that should be dear to you – competition. Common law procedure has been broken for as long as public inquiries have existed. But equally, those inquiries have almost always been in part motivated by a desire to maintain X country’s ‘competitiveness’. And invidivual common law courts constantly fight for cases – see eg: State v Federal courts here and in the US; London v the world; Singapore v SE Asia, US v London and the world. For more history, the common law as we know it developed out of competition between the King’s Bench and Admiralty courts, with the Chancellor’s judges thrown in.

This does, of course, exist in civil law countries – but only ‘outside’ the system. The popularity of (the essentially private) Dutch commercial arbitration that I referred to above is an example.

In theory, civil law countries should be more than capable of this – their governments certainly are, but their courts don’t seem to do it. Perhaps their bigger emphasis on ‘chinese wall’ style separation of powers explains this?

Ken Parish
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Ken Parish(@ken-parish)
13 years ago

Patrick, the speech by Justice Kirby deals with your first point, saying that German (and Spanish courts) have a tradition of much more complete, reasoned judgments, whereas the French don’t (and also don’t permit dissenting judgments).

There’s no reason why Australia could not consider implementing some aspects of European practice but not all of them. For example, I certainly don’t think we should emulate the European practice of exhaustive legislative codes governing everything. It’s too rigid and inflexible. We should continue with our current combination of utilitarian common law reasoning and heuristics together with doctrine of precedent, supplemented with legislation where appropriate. And we certainly should not abandon our tradition of reasoned judgments and permitting dissent.

But there may be a point in considering adopting the innovation of having specially trained judges, who might well be experienced counsel but would be obliged to undertake (say) a couple of years of judicial training as well. Moreover, I think we should also consider adopting the inquisitorial method (judges actively seeking truth rather than merely acting as passive referees), with suitable lay experts (doctors, engineers etc) co-opted to the tribunal of fact to assist with deciding matters of expert evidence.

One advantage of this would be that we could dispense with many of the current exclusionary rules of evidence, as the Europeans do, because properly trained judges are far more capable of weighing evidence without the need to exclude completely types of evidence that might prejudicially sway an untrained lay jury.

I think there would be many advantages of such a system, not least that it would reduce the length and complexity and expense of trials and allow litigants who can’t afford expensive lawyers to have far more of a fair crack from the justice system. Of course, these are (perhaps unconsciously) precisely the reasons why most lawyers oppose such reforms.

Patrick
Patrick
13 years ago

KP

I agree with your whole second paragraph. I am less convinced about the second. I think some training would help a lot of judges, but I envisage mainly training about the ‘KPIs’ of the job – such as turn-around times, efficiency, etc – and how to achieve them.

I am far less convinced by the inquisitorial method. Commercially, it is almost irrelevant since we have arbitration if we want (and very often companies do want). But it significantly increases the burden on the state and makes phenomena such as the popularity of the London High Court with international shipping or the Delaware Chancellery with international bankruptcies impossible. NG should note that these are rare examples of a government providing a global public good at a profit.

In criminal matters I guess I know too many criminal lawyers (not many in fact, but they are forceful types enough that quality easily outweighs quantity). Also I am perhaps more aware of the stuff-ups of inquisitorial systems – I can’t see any compelling reason for the change in criminal law.

Where perhaps it is relevant is very large commercial cases. These are effectively unmanageable – they really require a panel of inquisitors with extremely severe powers of sanction. T7 is the obvious example but hardly the only one. These are rare because most companies are too smart to get involved. Most of the exceptions involve megalomaniacs like Stokes.

Sinclair Davidson
13 years ago

Jacques – were they professional, or dragged off the street and paid a fee? (The moon is a hrash mistress?)