Why common law legal systems are better for business

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When businesses have the option of choosing contract law for their transactions, they should always consider using a common law jurisdiction, in which the UK is preeminent, even for cross-border transactions and transactions with few connections. with the United Kingdom.

The common law is based on precedents which are the product of contradictory argumentation and of an adaptation to the evolution of the business environment, while the codes provided for by the civil law courts attempt to lay down rules for every situation that may arise and require the parties to take this approach. This brings benefits for the common law in three key areas:

1) It is flexible and open to innovation

This is particularly important for companies operating in innovative sectors such as technology and financial services. Courts try to find logical solutions to new problems by building on existing case law without having to wait for new legislation. The law can adapt quickly to unforeseen business innovation by lawmakers in a way that more prescriptive and controlling civil law systems cannot. The freedom for parties to agree on what they want (subject to limited exceptions to prevent exploitation) contrasts with the goal of uniformity in the civil code. In addition, the common law recognizes the concept of trust which brings another weapon to its flexible arsenal.

2) Certainty

The very “reasoned” method of statutory interpretation in civil law systems (such as that of the EU) can lead to unpredictability and inconsistency between different judges. In contrast, the emphasis on legal precedents in common law systems allows businesses to predict legal outcomes with a much higher degree of certainty.

3) Highly skilled and impartial dispute resolution

The UK has an independent and impartial judiciary which is bound by precedents set by the most experienced and competent judges. Additionally, there are few restrictions on access to the UK for overseas-based law firms, which means that many of the world’s leading international law firms practice in London.


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