Five Lectures on the Common Law with Comparative Reference to the Law in China

AuthorAndrew Godwin, Tan Cheng-Han, Paul S. Davies, Jeremy Gans, and Edwin Simpson
Pages64-124
64 TSINGHUA CHINA LAW REVIEW [Vol. 8:63
FIVE LECTURES ON THE COMMON LAW WITH
COMPARATIVE REFERENCE TO THE LAW IN CHINA
Andrew Godwin, Tan Cheng-Han, Paul S. Davies,
Jeremy Gans & Edwin Simpson
Abstract
In April 2014, leading scholars came to China to deliver lectures addressing fundamental
areas of the common law, including property law, agency law, equity, criminal law, and tax
law. These lectures explore the development, features, and application of their respective
areas of the common law. In addition, the lectures compare aspects of the common law with
the approach in civil law jurisdictions and, in particular, in China. By examining the
development of the common law and stare decisis, one may gain insights into common law
concepts, many of which are similar to those in the Chinese legal system.
I. INTRODUCTION
In April 2014, a lecture series was hosted in China exploring
several areas of the common law. Two teachers from each of the
following law schools: Melbourne Law School,1 National University
of Singapore Faculty of Law,2 and University of Oxford Faculty of
Law3 delivered the lectures. Their visit was made possible through
the generous support of Allan and Maria Myers4 and four Chinese
law schools: Tsinghua University School of Law, Peking University
Law School, Fudan University Law School and KoGuan Law School
of Shanghai, Jiaotong University.
For the purpose of recording some of these lectures for future
reference, and also as an expression of appreciation, we have decided
to publish five of these lectures. The lectures address five
fundamental areas of common law: property law, agency law, equity,
criminal law, and tax law. Each lecture may be read together with the
other lectures or separately.
These lectures explore the development, features, and application
of their respective areas of the common law. In addition, the lectures
compare aspects of the common law with the approach in civil law
countries and, in particular, in China. Various themes emerge from
the lectures in terms of the common law. Four of these themes are
explored below.
#
1 Jeremy Gans and Andrew Godwin.
2 Dora Neo and Tan Cheng-Han.
3 Paul Davies and Edwin Simpson.
4 Mr. Allan Myers QC is a prominent alumnus of Melbourne Law School and the Faculty of Law,
University of Oxford.
2015] COMMON LAW AND LAW IN CHINA 65
A. The Definition of “Common Law” Depends on the Context
When developing an understanding of the common law, law
students and lawyers from other legal systems face certain
challenges. One of these challenges is determining what the term
“common law” actually means and how the term is used. It is
important to note that there are at least three contexts in which the
term may be used:
(1) When comparing legal systems between countries: to refer to
the legal system that emerged in England and to distinguish it from
other legal systems, such as the civil law system that emerged in
continental Europe and China’s own distinctive legal system (for
insights into this, see the lectures by Gans, Godwin and Tan);
(2) When comparing sources of law within common law
jurisdictions: to refer to case law (i.e. law made by judges when they
decide cases) and to distinguish it from statute law that is enacted by
Parliament (for insights into this, see the lectures by Gans, Godwin
and Simpson);
(3) When comparing sources of case law within common law
jurisdictions: to refer to the body of case law that was originally
made by judges in the “common law courts” and to distinguish it
from “equity”; namely, the body of law that was made by judges in
the “courts of equity” (for insights into this, see the lectures by
Davies and Godwin).
As a result, an understanding of the context is very important to
an understanding of how the term is used.
B. Case Law (Judge-Made Law) is a Source of Law in its Own Right
In common law jurisdictions, the role of case law as a source of
law is underpinned by the doctrine of precedent – also known by its
Latin name stare decisis, which literally means “to stand by the
decision”. According to the doctrine, courts must abide by the
decisions of higher courts and must not overturn their own
precedents without good reason. In fact, it was only relatively
recently in the history of English common law – 1966 – that the
Supreme Court of the United Kingdom (formerly, the House of
Lords) expressly decided that it was not bound by its previous
decisions.
Although the doctrine of precedent does not apply in China, the
referential value of case law has become greater as a result of the
adoption of a guiding case system by the Supreme People’s Court in
2011.
To understand how the doctrine of precedent works, it is essential
to bear in mind that it is not the decision in its entirety that is
binding. It is the legal reason or legal principle on which the decision
was based that is binding. This is often referred to by the Latin
66 TSINGHUA CHINA LAW REVIEW [Vol. 8:63
phrase ratio decidendi, which can be translated as “the reason for
what was decided”. In addition, when hearing a case, a court will
only be bound to follow the decision in a previous case if the facts of
the current case come within the scope of what was contemplated by
the ratio decidendi of the previous decision. If the facts do not come
within the scope of the ratio decidendi, the court will distinguish the
previous decision “on its facts” and, although it might be persuasive,
the previous decision will not be binding.
It is also important to note that any statements made by a judge
that do not form part of the ratio decidendi are not binding, although
they might be persuasive. Such statements are referred to by the
Latin phrase obiter dicta (literally, “statements in passing”).
As noted by Davies in his lecture, it is often difficult to identify
the ratio decidendi of a case and debate about legal principles has
been the subject of many appeals and academic commentaries over
the years. This is perhaps one of the greatest disadvantages of
case-law. At the same time, it could be argued that it is also one of its
greatest strengths, as it permits legal principles to be adapted to meet
the circumstances of specific cases.
The use of case law as a source of law (i.e. in addition to statutes
enacted by Parliament) has certain advantages and disadvantages.
One of the advantages is that the common law can be developed
incrementally by courts as and when disputes arise, and does not
require a statute to determine or confirm the legal position. This
imbues the law with a high level of flexibility and the ability to adapt
quickly to new circumstances. This is particularly advantageous to
commercial transactions, where the courts in common law
jurisdictions have traditionally demonstrated a pragmatic approach
that attempts to balance transactional efficiency with the need to
achieve fairness between the parties, including third parties. The
issues discussed by Godwin and Tan illustrate the pragmatic view of
the common law as it seeks to achieve an appropriate balance
between persons who have competing claims or interests and also the
importance that the common law attaches to achieving certainty and
stability in commercial transactions.
On the other hand, one of the disadvantages with the use of case
law as a source of law is that in its attempts to achieve certainty and
stability, it may not always adopt the most logical approach. This is
illustrated by Tan, who discusses issues concerning agency law and
the retrospective effect of ratification. In addition, it may leave
certain issues unresolved or unsettled, as explained by Godwin in
relation to the effect of contractual restrictions on the assignment of
debts.
Further, certainty and stability may be undermined if a decision
by the highest court in a common law jurisdiction reinterprets or
overturns established doctrine without any advance warning. This is

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