Business, political and legal systems focus on relationships between the systems; the impact of separation of powers on the legal system; differences between criminal and civil law and how common, civil law and sharia law systems operate.
Business, Political and Legal Systems
a. Explain the inter-relationship of economic and political systems
Law is organised on national lines which means that each jurisdiction has its own laws. However some national laws have been adopted by other countries for their legal system.
The three key legal systems or underlying methodologies of law that have been adopted by different countries are:
- Common Law – named after a historic system formulated in England
- Civil Law – originated in continental Europe (e.g. France and Germany)
- Sharia Law – bound upon the religion of Islam
The three basic kinds of economic systems are:
- Planned Economy – decisions and choices about how resources are allocated are made by the government; most wealth is owned by the government
- Market Economy – decisions and choices are left to market forces of supply and demand; most wealth is owned by individuals
- Mixed Economy – decision and choices are made by government and the market; wealth is divided between the government and the private sector
The rule of law is the degree to which the law regulates individual behaviour.
Law making can be:
- Democratic – developed by the citizens; laissez faire political systems where people have choices
- Dictatorial – developed by the government and regulated and controlled by same
A legal system consists of the laws in a country and the “mechanisms” that are used to regulate and enforce the laws.
Laws are bodies of rules that help society to function. Laws do not have to be written down. Law can be classified as either national or international or criminal or civil.
Conflict of laws occurs during global interaction and when legal rules conflict. People from different countries with different legal rules interacting with each other has prompted the creation of international legal systems.
b. Explain the doctrine of the separation of powers and its impact on the legal system
In democratic systems, power is separated among three main bodies:
- Legislature – Enacts, amends and repeals laws (e.g. Parliament in the UK
- Executive – Decides which laws should be made and put into action (e.g. head of state or head of government)
- Judiciary – Rules on disputes about laws and interprets and apply laws (e.g. criminal law courts, civil law courts)
c. Explain the distinction between criminal and civil law
Criminal law exists to punish people who have engaged in conduct that is prohibited by law. Key components of criminal law are:
- A crime
- A prosecutor (usually the State)
- A criminal case
Crimes, punishments and evidence required to convict someone, vary from location to location.
Civil law exists to “regulate disputes about the rights and obligations of persons.” Key components of civil law are:
- The claimant
- The defendant
- A civil case
d. Outline the operation of the following legal systems – common law, civil law, sharia law
Common law “builds up over time” and is added to by the legislature and judicial precedent. Old laws are not forgotten or become invalid because they are old. New laws are “presumed not to alter or merely add to” the existing law, unless it says so. Common law systems are derived from the law developed in England between 1066 AD and 1400 AD.
Common law is defined as the “body of legal rules common to the whole country which is embodied in judicial decisions.”
Equity is the “specific set of legal principles developed by the Court of Chancery to supplement the common law.”Where equitable rules conflict with common law rules, the equitable rules will prevail. (Earl of Oxford’s case 1615).
Sources of law in England:
- common law
- European Union law
In common law systems, judges set and apply judicial precedent, interpret statutes and conduct judicial reviews.
Precedent is a previous court decision which has to be followed by other courts who must decide subsequent cases in the same way. Judicial precedent is based on reports, rules and classification. Precedent is only binding if the material facts of the cases are the same and can be overruled by higher courts.
Judges can avoid precedent if:
- the previous case was made without care (incuriam)
- too obscure
- too broad
- it conflicts with European law
- facts are different
Civil law systems seek to ensure “comprehensibility and certainty by mean of codification via statutes and administrative regulation.” Civil law was developed in continental Europe.
Sources of civil law in France are:
- EU law
- administrative regulations
In civil law systems, judges apply the law or perform a judicial review.
Sharia Law is based upon the religion of Islam and extends into the beliefs and religious practice.
The sources of Sharia Law are:
- Quran – Allah’s divine revelation to his Prophet Muhammed
- Sunnah – The acceptable course of conduct derived from the Prophet Ahadith
- Madhab – Five schools of thought based on writings and thoughts of major jurists
- The Shia School
- The Hanaafi School (Imam Abu Hanifa)
- The Maliki School (Imam Malik)
- The Hanbalie School (Imam Ahmad Ibn Hanbal)
- The Shafii School (Imam As-Shafii)
In Sharia Law, judges, who can be clerics, interpret the law in line with Sunnah Abadith and perform a form of judicial review.
Ijtihad ascertains the law using intellectual exertion by a jurist in an effort to derive an answer to a legal question. It is based on Hadith.
Qiyas is the Sharia law’s version of judicial precedent.
- Paper F4 Corporate and Business Law (Global): Study Text for Exams up to August 2017
- ACCA F4 Syllabus and Study Guide
- Open Tuition’s ACCA F4 Corporate and Business Law Study Materials