THE COMPARISON OF COMMON LAW AND CONTINENTAL LAW
Common law and continental law systems are “products of two fundamentally different approaches to the legal process.”[1] When it comes to continental law, codes and statues prevail and the common law dominantly rests on judicial decisions. Therefore, continental law is based on the theory of separation of powers, whereby the legislator’s role is to create law and the courts’ role is to apply the created law. This approach is contrary to common law, where the courts’ main task is to actually create law by making judicial decisions within the framework of the statutes.
Given the different approaches of the two legal systems, the practitioners of law must also follow a different mindset in the course of coming to legal conclusions given the statutes and case law at hand. Thereby, a continental lawyer usually will start from a legal norm created by the legislator, contained in a code or statute and will draw conclusions by deducting the applicable law to the given facts of the actual case.
On the other hand, a common law practitioner will compare the given case to other previously adjudicated cases and will search for similar legal issues already decided upon by the courts and relevant to the facts of the actual case. Therefore, by comparison of relevant cases, the binding rule will be determined by means of the method of induction.
Given that these two fundamental differences arise, that is to summarize, continental law basing its conclusions on deduction and common law reaching its case resolution by means of induction, therefore continental law is more conceptual and common law is more pragmatic.[2]
The two legal systems are generally two separate approaches aiming for the same goal. As such, it is only natural that cultural differences are also implemented within such approaches and are traceable in all areas of law, as in corporate law as well. Although the legal framework as to how corporations are founded and incorporated are generally rather similar, some factors will have a different role and emphasis in comparison to each other than others, exactly due to the cultural differences among countries following either common or continental law. However, a unifying core and a rapprochement can also be seen in the fact that although the basis of all corporations, no matter the legal system which it is laid upon, is granted by the companies’ by-laws, such as the deed of foundation or articles of association, nevertheless the corporate governance policies serving as the framework for what a company represents in its everyday core operational system and how it wishes to achieve its goals through management are gaining more and more importance.
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[1]“Civil Law and Common Law: Two Different Paths Leading to the Same Goal”, Dr. sc. Časlav Pejović, Associate Professor of Private International Law, Kyushu University, Japan, (2000), page 10.
[2] “Civil Law and Common Law: Two Different Paths Leading to the Same Goal”, Dr. sc. Časlav Pejović, Associate Professor of Private International Law, Kyushu University, Japan, (2000), page 10.