IB113 Business Law - Notes PDF

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Summary

The English Legal SystemLegal System - A set of rules that governs the way a society functions - Allows disputes to be resolved without the need to resort to threats or violence It offers a degree of protection to the society asit oftens deters people from behaving in ways that would be very disrupt...

Description

The English Legal System Legal System

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Reasons for an effective legal system

A set of rules that governs the way a society functions - Allows disputes to be resolved without the need to resort to threats or violence It offers a degree of protection to the society as it oftens deters people from behaving in ways that would be very disruptive (stealing, using violence, etc).

1. Business Confidence - Businesses will invest and deal with other parties if they know that the courts will provide a remedy/protection, if the other party breaks the ideal. - Helps economy grow 2. Business Protection - Governments are powerful organizations who could act against the interests of businesses without laws to control their use of power - Law protects business from abuse of power by the state

World Legal Systems

3 most common systems: 1. -

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Civil Law system E.g. Argentina, Brazil, France, Germany Based historically on Roman law Laws are devised by designated law-making bodies and written down as rules for society to abide by Most advanced Civil Law systems are Codified

2. Common Law system - E.g. Australia, Bahamas, UK, USA - Case decisions made in courts are of central importance - Law is created by deciding cases and recording the reasons for the decision - The decisions of senior courts must be followed in subsequent cases → similar cases - Designated body set out the laws - In the UK, the court decisions (judgement) creates the body of law 3. Mixed Law system - E.g. China, Hong Kong, Singapore, India - Where two or more legal systems operate side by side with equal importance

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The English Legal System

Mixed systems may include common law, civil law, customs of a society, religious rules

- 4 important aspects of the English Legal System: 1. Classification (of the law) 2. Administration (the courts and institutions which deal with legal disputes) 3. Sources (how the law is created) 4. Legal Personnel (the legal profession who advise and assist in resolving those legal disputes)

CLASSIFICATION OF THE LAW Classification of the law

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English law is divided into 2 main categories: criminal law and civil law. Lawyers more frequently deal with civil matters Criminal Law - murder, rape, theft, deception, driving offences, tax evasion Civil Law - contract law, property law, family law, tort law, wills and probate, company law - Tort Law → when the individual/corporation does something to hurt someone hence ‘tort’ is the compensation that victims will get using tort law

CRIMINAL LAW: - It is an offence against society (as a whole) - The offender (defendant) will be prosecuted - The Crown prosecutes the Defendant (offender) and may be punished in order to protect the public - Police put together an embody of info and refer potential prosecutions to the CPS (Crown Prosecution Service) who are made up of lawyers that represent the society - They decide whether or not to prosecute with evidence - Cases are cited as e.g. R v Smith 2015 - R is the Crown - Smith is the defendant - If no prosecution is brought by the Crown, individual can bring a private prosecution (e.g. Brown v Smith 2015) - The date is when it gets to the court - Criminal Trials take place in the Magistrates’ Court or the Crown Court - Magistrates “Justice of the Peace” Court are made up of credible members

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of society (not qualified lawyers) and deal with minor criminal offences (e.g. drunk driving) - A document ( summons) is produced - Crown Court - Senior - Deal with indictable offences and produce an indictment (document) The Defendant is found Guilty or Not Guilty - Everyone is assumed to be innocent until proven guilty → “beyond reasonable doubt” (standard of proof) If convicted, the Defendant is punished/treated - E.g. prison, fine, community order - Anti-social behaviour order → banned from certain places Costs - Legal aid is available to defendant (state funding) - Everyone has a right to have legal aid

CIVIL LAW: - Involves disputes between individuals/businesses - Police are generally not involved and the dispute has no relevance to society as a whole

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The Claimant (Plaintiff) sues the Defendant - E.g. Jones Ltd v Smith Ltd 2015 - Burden of proof is on the claimant to prove on a balance of probabilities (more probable than not hence lower stands than criminal law “beyond reasonable doubt”) that the defendant committed the wrongful act

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The Trial takes place in the County Court or the High Court - County Court - minor disputes e.g. faulty car - High Court - major disputes e.g. serious road accident - Defendant may have to pay large amounts for compensation The Defendant is found Liable or Not Liable The Claimant (Plaintiff) is compensated if he wins the case. Remedies include: - Damages (money)

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The Claimant is entitled to be paid by a sum of money by defendant → compensation rather than punishing - The amount is determined by the court Injunction - A court order to prevent/stop one party from doing something → prevent future behaviour Specific Performance - A court imposes an order on an individual/business to do something Costs - Legal aid (state funding → provision of the lawyer by state) is only available to the very needy so parties must fund their own case - In most Civil Law cases, businesses have to fund the cases themselves - The loser will usually be required to pay the other party’s costs

Pro bono lawyers are lawyers who are prepared to put in more effort for good cause

CRIMINAL & CIVIL LAW: - It is common for both the civil and criminal law to be committed at the same time - For e.g., a driver who is speeding and crashes into another vehicle is likely to have breached both the criminal and civil law - Criminal: The Defendant may be prosecuted for speeding, careless driving and the case would be heard in the Magistrates Court - Civil: The Defendant may be sued by the other driver in the Tort of Negligence and the case would be heard in the County Court or the High Court, depending on the value of the claim Section 11 Civil Evidence Act 1968: - The normal court rule of evidence is that a court must not be informed of a defendant’s previous criminal history because this information may prejudice the result - However, under section 11 of the Civil

Evidence Act, this rule does not apply where a crime and a civil wrong have both been committed at the same time - In such circumstances, the civil court hearing a claim brought by the injured driver can be informed if the Defendant is convicted of a criminal offence - But no other criminal history can be disclosed -

Past criminal history is taken into account when deciding the appropriate sentence to impose on a convicted Defendant.

ADMINISTRATION OF THE LAW Administration of the Law - Where and how are legal disputes resolved?

Alternative options to the court system: - Arbitration - Alternative dispute resolution procedure where the parties refer the dispute to an arbitrator to resolve, rather than using the court system - The arbitrator is usually someone with relevant expertise in the area of dispute → chosen by the business, private matter - This procedure is much quicker and is cheaper for businesses - It is used for businesses who want to maintain a relationship -

Mediation - Trained third party attempts to help the parties negotiate a settlement

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Tribunals - Set up, under various Acts of Parliament, to hear particular types of cases and deal with a range of issues such as immigration, employment - Created by the government, public matter

Hierarchy in the English Court System: -

Supreme Court (the highest court in the land) - They never hear cases for the first time

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Each court within the structure is said to have a particular type of jurisdiction. - This is the power to hear a case and each court within the system has different jurisdiction

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Administration of the Law: Magistrates Courts

2 main types of jurisdiction: - Jurisdiction at first instance: a court having the power to hear a case which is being trialed for the first time - Jurisdiction on appeal: a court has the power to hear appeals (appellate court) Some courts have exclusive jurisdiction, others can hear both types of cases.

Magistrates Courts - Staffed by Justices of the Peace/Magistrates (high moral standing members) - Part time voluntary role carried out by well-respected members of society - They sit on a bench of 3 “Lay Magistrates” - Exclusively first instance jurisdiction -

Criminal Jurisdiction - Summary offences - Summons sent to defendant by post - 96% of all crime is trialed in the magistrates court - Maximum penalty is 12 months imprisonment/£5,000 fine - Hybrid offences - An offence, neither minor or major, described as a case triable either way (in the Crown or Magistrates) - Most defendants choose the Magistrates Court but statistics show there is a higher chance of acquittal in the Crown Court - Transfer Procedure - Start in the Magistrates Court - The defendant is given a formal statement of the offences at which he/she is charged - Youth Courts - Cases involving young offenders - A specifically selected group of JPs sit to hear these cases - Reporting restrictions apply (public are not allowed in, newspaper cannot record name)

Civil Jurisdiction - Magistrates’ courts have limited civil jurisdiction but do deal with:

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Administrative of the court: Crown Courts

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Licensing issues Enforcing payment of public utilities (e.g. gas, water, council tax)

Hear appeals from the Magistrates Court The United Kingdom is divided into 7 geographic regions and the main towns in each region have a crown court

Judges in the Crown Court: - Judges are allocated based on crime seriousness - High Court Judges - Given the most serious crime - Circuit Judges - Recorders - Part time lawyers training to be a judge - Given the most trivial cases Criminal Jurisdiction: - Indictable Offences (trial or sentence if defendant pleads guilty) - Major jurisdiction - Exclusively criminal based - Indictment (document) is prepared, giving details of the offences that the defendant is charged with - The case is tried by a Judge and Jury (12 ordinary people of the public) - The Judge directs the Jury on the law - The Jury makes the decision - It is 100% private, no members of the court is allowed to be present during the Jury’s discussion - If Jury cannot reach a verdict, trial would be cancelled - If the Defendant pleads GUILTY, the judge will simply pass sentence and no jury is needed - Sentencing of Defendants referred from the Magistrates Court: - A judge will also sit without a jury to: - Pass sentence in cases tried in the Magistrates Court which are then referred to the Crown Court for sentencing - This power is used where the crime is more serious than it first appeared or the

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Administrative of the court: The County Court

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defendant has a serious criminal record and the JPs (Justice of Peace) feel that their powers are inadequate after hearing the case Appeals from the Magistrates Court and Youth Court against sentence and conviction - A Judge will also sit without a jury, but with 2 JPs/Magistrates to: - Hear appeals against sentence or conviction from Defendants convicted in the Magistrates Court or Youth Court - Appeals are against sentence or conviction (reconsider the guilty verdict) Before 2014, there were different County Courts. Now, there is a single county court which is standardized. → important change introduced by the Crime and Courts Act 2014 - Hearings, however, continue to take place in the County Court buildings across the country which are known as the hearing centres, where the work of the County Court takes place - Changes to the financial limits of the County Court were introduced, which increased the number of cases the court could hear - Hears appeals from the small claims track

Judges in the County Court: - Circuit Judges - Most senior judges in the county Court (civil disputes) - Hear most cases - Assisted by District Judges which hear less serious cases (less than £10,000 in value) and are often part time lawyers to be a judge Jurisdiction - Exclusively civil (no criminal work): - Contract disputes up to £100,000 - Personal injury claims up to £50,000 - Equity matters such as trusts, mortgages and the estate of a deceased person up to £350,000 - Bankruptcy of individuals and companies

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Small claims procedure up to £10,000

Importance of County Courts: - Provides ‘cheap and speedy settlement of small civil disputes’ - Vast majority of civil claims are heard in the County Court Administrative of the court: The Family Court

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Administrative of the court: The High Court of Justice

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Previously, family disputes were resolved by the County Courts or Magistrates Courts. Now, the Family Court was introduced to hear all disputes relating to family issues (marriage, divorce, maintenance, custody of children, adoption, etc) 4 levels of Judge in the Family Court: - Lay Magistrates - District Judges - Circuit Judges - High Court Judges If very complex issues are involved, the Family Court may refer the case to the Family Division of the High Court Court which has civil and criminal jurisdiction at both first instance and appeal level Has 3 separate divisions with 3 jurisdiction: Chancery, Queen’s Bench and Family Divisions. - Chancery: (Head = Lord Chancellor) - Deal with company law and partnerships - Disputes over the administration of the estates of deceased persons (involves wealthy people) - Patent and copyright issues (intellectual property) - < 1m GBP cases - Family Division: (Head = President) - Deal with international cases (where partners live in different countries) and appeals from issues resolved in the Family Court - Queen’s Bench Division: (Head = President) - Most important of the High Court - Deals with contract claims involving substantial sums of money (£100,000+) - Tort claims involving substantial sums of money (£100,000+ for personal injury cases) Hearings are usually before one Judge but for

appeals and important matters, 2 or more Judges sit together and the Court becomes known as a Divisional Court Administrative of the court: The Administrative Court

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Reform of the Civil Justice System

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Hears administrative law cases and acts as a supervisor of inferior courts and tribunals - E.g. Decisions of immigration bodies, decisions of government ministers Normally 3 Judges sit to hear a case This court also hears important criminal appeals on a Point of Law from the Magistrates and the Crown Courts - Appeals which challenge the procedure by the criminal law/court Hears both criminal and civil jurisdiction The Civil Procedure Rules (1999) “CPR” Criticism of the Civil Justice System - Lord Woolf’s report “Access to Justice” identified a number of key problems in the existing system: - Cost - Cost of expert witness (e.g. Financial disputes may involve an accountant) - People felt that the costs to bring a case to court was too expensive - Lawyers often are paid at the end - If businesses lose the case, they may go bust and may be unable to pay lawyers - Limited availability of state funding (legal aid) - Delay - Cases should take months/years to come to trial - Speed was determined by the lawyers - Stress - Litigants felt stress due to delays in the legal system, uncertainty about outcome, formality of proceedings (wigs, gowns, legal

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The Civil Procedure Rules (CPR) 1999

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Time spent attending court hearing - Meetings w/ lawyers - Obtaining evidence/completing documents - time= money in business The report made a number of recommendations to make the civil courts more accessible to the general public. - Recommended that High Court and County Court jurisdictions become one, with one set of rules, to allow applicants to start proceedings in any court - Extensive training programmes for Judges were also recommended → emphasis on the need to encourage full use of IT facilities in court

Introduced to implement many of Lord Woolf’s proposals which resulted in radical changes to civil litigation - Drafted in plain English, rather than technical legal jargon and simplified many legal rules and procedures involved in civil litigation - Process was now the same regardless of which court you are in

Changes include: 1. Procedures to encourage settlement out of court - CPR believed that litigation should only be taken as a last resort The CPR gave Judges powers to encourage settlement - The power includes imposing extra cost penalties on any unreasonable party (including costs imposed on the lawyers [not clients] who delay proceedings) 2. The CPR introduced the opportunity for claimants to make offers to settle [Part 36 offers] - Allows claimants the same opportunity for settlement as defendant’s who, for some years, had been able to make

payments into court - Prior to CPR, defendants could make payments into court - This existed BEFORE the CPR rules were introduced - Strategy used by defendants to promote settlements - Involves paying into court a lower sum of money (than the claimant sued the defendant for) which the claimant can accept to end the case - If the claimant refuses and fails to ‘beat’ the payment in at trial (by losing), he will incur cost penalties as claimant has caused unreasonable hassle on both parties Example: - December: Claimant (C) sues Defendant (D) for £125,000 → High Court, Queen’s Trial - January: D informally offers £100,000 to settle the claim and avoid trial - February: C refuses the offer - March: D pays £100,000 into court. The court notifies C. - April: C still refuses to settle for £100,000 - September: Trial takes place - C wins the case but is awarded only £95,000 in damages (less than what D offered in March and what C could’ve taken) → less than the payments into court - So C must pay ALL COSTS of both parties from March onwards because C didn’t beat the payment in court at the trial This is strategy Defendants who are clever can use to pressure Claimant to drop the case. Claimant’s Formal Offer to Settle [Part 36 offer] - Introduced by the CPR - Intended to create fairness by allowing claimants a similar strategy to promote settlements - Instead of paying money into court, a claimant can offer to settle for a lower figure - If the defendant refuses to agree to the

settlement and loses the case, interest penalties are imposed on the judgement debt Example: - December: C sues D for £125,000 - January: C informally offers to settle for £100,000 to avoid going for trial - February: D refuses the offer - March: C places a letter offering (Part 36 Offer → formal offer) to settle for £100,000 into court and the court notifies D - April: D still refuses to settle for £100,000 - September: Trial takes place - C wins the case and is awarded £105,000 in damages (more than the settlement offer) - So D must pay a high rate of interest (maximum of 10% above base rate) on the whole or part of the sum (i.e. £105,000)awarded from March onwards. because D did not pay the £100,000 that they should’ve cooperated (caused hassle to both parties) 3. Taking Civil Cases to Court - The cost of litigation and the resources allocated to it should be proportionate to the complexity and size of the claim - Judges play an active role as case ma...