Twofish's Blog

September 7, 2006

Notes on China Law Blog

Filed under: china, law — twofish @ 5:33 am

http://www.chinalawblog.com/chinalawblog/2006/09/dramshop.html

China’s legal system is based on the civil law tradition and is heavily influenced by German law rather than English law, and so the concept of a “cause of action” as it exists in common law really isn’t applicable. Rather than having a well defined list of situations which are grounds for a law suit, civil law systems have a set of general principles involving rights and obligations.

Also the concept of a “tort” does not exist in civil law systems. Rather there is a concept of a “delict” which is a violation of a right that gives rise to an obligation. The whole concept of a “right” in the German law tradition is very, very different IMHO from the concept of a “right” in the Anglo-American legal tradition. (Basically in the Anglo-American tradition a right is something that the government cannot do, whereas in the German tradition “rights” are always paired with “obligations” and the entire system of civil ligitation is based on a series of right-obligation pairs.)

Having said that, because the laws are so new, and because much of the law has not been codified, Chinese judges play a much more important role in shaping the law than most of the counterparts in more developed civil law systems. A lot of what the law is is determined by judicial precedent, which gives Chinese law a different “feel” than most civil law systems.

I also don’t think that Chinese law will end up looking anything like American law, for the reason that every jurisdiction ends up with laws that look different from the laws of other jurisdictions. Even in cases where China borrows from the United States, the outcome might be quite different. The classic example is that China borrowed from US securities law the very strict separation between investment banking and commercial banking, and has kept this despite the fact that this separation has been abolished in the United States.

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4 Comments »

  1. You raise some very interesting points, some of which I agree with and some of which I disagree. I agree with your analysis of civil law systems and I agree China’s legal system has been heavily influenced by German law (sometimes by way of Japan), but I do see that changing. China is now pulling its laws in from everywhere and it is my experience that it is the rare Chinese lawyer or judge who does not see the United States at the forefront of business law. Of course, China’s laws will never be exactly like those in the United States, nor will their enforcement of them ever be the same. However, I stand by my prediction that China’s laws are converging towards a U.S. model.

    I also disagree with you regarding precedent in China. One of the problems with China’s system right now is that issues keep getting tried again and again as though they have never been previously decided. My sense is that unless China’s Supreme Court has issued a legal ruling, it remains fair game in the courts below.

    Comment by China Law Blog — September 7, 2006 @ 2:24 pm

  2. A lot of the German influence on PRC law comes through Taiwan, which still uses the pre-1949 legal codes which were based on Germany.

    I do think to talk about a “US model” you need to be more precise about what that statement means. Certainly there is no movement in China toward a system in which judges are appointed from practicing attorneys. Also, the civil law origins of Chinese law are always going to give it a different flavor than American law. (Then again, things like the Uniform Commericial Code help give American law a somewhat civil law flavor.)

    Just to give one example, judges in common law jurisdictions are very, very careful with rulings because all judicial rulings have precedental value. Judges in civil law jurisdictions don’t have as much power to set precedent so that the balance tends to be in favor of speed versus accuracy. This increases the cost of litigation in the United States which means that in most business disputes people try everything they can to stay out of court and settle things directly or via arbitration. In most civil law systems, “private justice” is frowned on, and that pushes the system toward speed at the cost of accuracy.

    The fact that judges in the United States are trained attorneys whereas a judge in China could be fresh out of school also changes things radically.

    What I think most people talk about when they say that “American model” is formal rule based systems, but I don’t think of that as particular American. France and Germany also have formal rule based systems, which are different. China is moving toward a formal rule based system, but the rules are probably going to be very different than the United States (even if they are functionally the same).

    (If you have some other meaning for “American model”, I’d be interested in knowing about them. I do see a lot of American thinking in securities law, but even there what comes out is very different.)

    The fact that the SPC issues rulings that have are de facto binding precedent makes things much different from the situation in most civil law jurisdictions (say France).

    Comment by twofish — September 7, 2006 @ 3:17 pm

  3. You are right, I should be clearer. I never meant to say that China was going to an American model in terms of procedure. I agree with you on your speed versus accuracy assessment and I do not see that changing, at least not much. I also agree with you on the value of precedent in the US system versus the China system.

    China is, however, slowly moving to appoint more lawyers as judges, but you are right to point out that even these judges usually have no practical experience.

    When I was talking about China law moving towards a US model, I was referring only to China becoming a more litiguous society and the courts aiding that transition by finding liability and assessing damages on claims where they had not done so in the past.

    Comment by China Law Blog — September 10, 2006 @ 2:00 am

  4. I think we are more or less in agreement here.

    One reason I am nitpicking on this particular issue is that a lot of the language used to describe Chinese society and law involves assumptions that aren’t necessarily true. For example, there is a stereotype of China being traditionally a nation without law that is moving to Western/American legal forms. The trouble with that stereotype is that it is historically unsupportable. If you look at the work of Philip C. Huang or Madeline Zelin, one finds that early 19th century China was an immensely litigitious society with a very well developed system of commercial law. The lack of litigation until recently then becomes very obviously a result of the political instability that China was under from the late 19th century rather than the result of any deep cultural aversion to formal legal systems.

    Also, at the other end, one finds that in the United States, most business disputes are settled more or less informally and simply do not result in a lawsuit, and even when they do, most lawsuits are settled out of court.

    The othe r interesting thing is that pre-modern Chinese legal practices have a lot of interesting influences on current events. There is a lot of interest in American law and legal practices, but this interest is not coming into a blank slate, and is interacting with pre-existing notions on the role of law.

    And it works both ways, the descriptions of China by Jesuit missionaries of the 17th century as a non-religious state ruled by an enlightened despot had a huge impact on European ideas of politics and law. Part of the impact was that these descriptions had a very strong impact on how the West has seen China (keep in mind that an enlightened despot was a good thing in the 18th century before the French Revolution), which causes problems sometimes since they are oversimplifications of what was really there.

    Just to pick an example of a weird interaction…. Me….

    Within the Western legal tradition is makes absolutely no sense for an astrophysicist to be interested in law since cosmological law and human law are considered to be separate. In at least part of the Chinese intellectual tradition, the laws of heaven and the laws of man are part of an organic whole, so it makes perfect sense for astrophysicists to be particularly interested in law and politics.

    Then again….

    If you trace back some of the ideas that I have on law and politics, you end up finding that some of the seem to have come from the Jesuits moving ideas from Europe to China.

    Comment by twofish — September 10, 2006 @ 2:54 am


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