COMMERCIAL LAWS ARE NOT EFFECTIVELY ENFORCED IN THE EU
By [Name]
Course
Professor’s Name
Institution
Location of Institution
Date
Introduction
Generally, commercial law can be defined as the law that governed the purchase and selling of goods and services during the exchange of those goods and services commonly referred to as a trade[1]. Other scholars such as Clarke, Hooley, Munday, Sealy, Tettenborn, & Turner (2017) have defied commercial law simply as the laws that regulate commerce[2]. Commercial laws are considered as one of the essential rules of law. This is because commercial disputes, also known as disputes that arise during the exchange of goods and services, have been said to arise frequently not only in the UK but also in other parts of the world[3]. Commercial laws protect the parties involved from any manipulation or unfairness. These laws in the UK are enforced through various bodies.
It is worth noting that the term enforcement encompasses the discovery, the deterrence, or punishing individuals who violate the stipulated laws governing the community or rehabilitation of the subjects in order to reinforce either positive or deter traits that go against the stipulated laws[4]. Enforcement has also been defined as the act of compelling the subject to comply with the stipulated laws by introducing harsh repercussions.[5] Commercial law in the UK is enforced under the sales of goods Act of 1979 and the unfair contract term Act of 1977[6]. The sales of goods Act cover the property law. Other law enforcement bodies that govern commercial law include the competition law and the European Union law, which regulates business transaction that involves two or more nations under the European Union. However, different scholars have had a different opinion that enforcement of UK commercial law has not been as dynamic in meeting changing needs as expected and as discussed in this paper.
The main research questions being reviewed in this paper include:
- Is the enforcement of commercial law in the UK ineffective?
Chapert2: Historical Development of Commercial Law in the UK
The historical development of commercial law can be viewed from the development of the merchant law and the rise of consumerism as analysed below
Lex Mercatorian (The merchant Law)
It is worth noting that the modern merchant law in the UK has its origin in the merchant law that was famously used during the trade in the middle ages[7]. The legal set up of ruling of trade cases led to the development of other components of the legal courses to protect the rights of various parties such as the Bill of exchange among other elements of the ruling that were developed during this era[8]. The law was applied equally by the merchants through the application of wisdom to reach a ruling that left both parties happy.
However, despite the fact that the merchants showed great skill in organizations and jurisdiction, the English legal system has been accused of having failed to create a substance legal framework that could have governed trade during this significant trade era in history. History records that the transition of Merchant law to codified commercial law is an era that has been documented to have massive flows in the way the law was enforced[9]. The codification of merchant law from to commercial has been described by scholars to have led to a complex system of reinforcement with some aspects of conflicts with other legal laws[10]. However, scholars have also documented the positive aspects of codification of the merchant laws to have resulted to important constituents of commercial claw such as the Bill exchange Act of 1882, and Sales of Goods Acts of 1893[11].
An example of a negative aspect of codification of the merchant law into international entails the Uniform law for international sales. The uniform international sales law has received various backlash due to the retrogressive nature of the international legal system. The adoption of law made it harder for the law to be enforced because every international body or country expects its jurisdiction to be adopted while conducting any transaction within its jurisdiction. Uniform international meant that the English law was considered to be superior to other laws[12]. The assumption of the superiority of the English law over other laws has been coded to be the greatest obstacle to the reinforcement of commercial law during this era and even the eras that followed
Chapter 3: Effectiveness of the enforcement of Commercial Law
Competition of Law
One of the statics aspects that have bee criticised by legal scholars entails the aspect of competition law. Competition law refers to the laws and regulation that have been put in place to regulate the market in order to bar practices that can promote monopoly[13]. It is worth noting that the codification of the merchant law into the commercial law saw the competition law being enacted and enforced as trade practices law. The law generally is meant to protect the small fish players in the market from practices done by the big fish players, which can make the small companies being wiped out[14]. Hence, to avoid monopoly, competition law reinforces fair market practices in order to level the ground for both the big and small companies. Currently, in the UK, competition law is reinforced by both private and public bodies[15]. Historically, the competition law was instituted after it was established that some big market wins were devising practices that can help them remain as the main players in the market[16].
This was not only witnessed during the merchant’s trade but also in later years. The business practices done by market players, the government, and the guild encountered great scrutiny in order to bar any shenanigans that could lead to a few players dominating the market. The competition law in the UK is meant to regulate the UK market and protects it’s from foreign dominance[17]. The competition law also houses the governing regulations such as Tariffs and Trade Acts. One of the major Scrutiny of competition law by scholars entails the shortcoming of the law that has been linked to the law favouring the minority[18]. The law has been accused of curtailing competitive markets and hence interferes with the concept of the invisible hand of the market. The term invisible hand of the market was coined by Adam Smith in his attempt to champion free markets[19]. For instance, competition Act of 1998 generally restrict practices by corporate organisations that operate within the UK jurisdictions to act in a manner that might lead to market domination[20]. These can include colluding to form cartels.
State Regulation
The United Kingdom company law is one of the main state laws that govern commercial transactions of goods and services in the UK. The latest company law in the UK was established under the company law Act of 2006. There are different constituents of company law such insolvency Act, European Union directives, and the Cooperate governance code of the UK. The United Kingdom has been complemented to be the first European country to implement the modern cooperate statute. This has assisted the investors in finding it easy to navigate through the UK commercial legal system during their operation. From an international point of view, the UK commercial has been commended for having the ability to design the transaction regulation that has been followed during the cross-border transaction. However, by virtue of not being flexible enough to give room for international legal system regulation, the state legislation has been termed to provide dictatorship regulation that is meant to benefit players in the UK yet leaving the international player feeling that they have been deprived of their freedom.
On the other hand, even the newly 2006 appeal commercial law Act has been accused of encompasses less contemporary trading issue and borrow a lot from the former old legal system. Numerous case laws under the UK legislation have been cited to give a vivid illustration of the effectiveness of commercial law. One such case law includes Kum v Wah Tat Bank Ltd[21]. From the verdict made by the presiding judge, it was clear that the commercial law only gives directive based on stipulated commercial code Acts and has not given room for the incorporation of the modern dynamic challenges cited in the contemporary society. This implies that the legislations that encompass commercial law in the UK utilize old legal inferences that might not be applicable in the modern trading world.
Roy Good in his journal’ Towards the Next Millennium cites various faults that illustrate ineffective enforcement of commercial law[22]. First and foremost, the author denotes that the self-regulation aspect of commercial law has given room for policymakers to make laws that fit their interest. The author emphasises that law should be made to help the society live in harmony through providing a solution to any form of conflict that might arise, contrary to the common expectation as the author denotes, the commercial law enforcement has given powers to the policymakers to twist the laws and the regulations as best fit. The author cites the ability of the legislation to give the bodies governing the transaction world to come up with a committee that can create the law that has not to yield the fruit intended. The author cites that the legislation has given powers to the administration who tends to formulate commercial regulation based on the prevailing conditions.
The administrators’ functionality in the enforcement of commercial law has been subjected to political and interest biases[23]. Other scholars that have supported this view include Tony Weir in his journal The Common Law system, who has cited the slowness of the commercial law in adapting and changing the ineffective legal measures[24]. The author cites that despite the inefficiencies of commercial law in handling contemporary transaction issues, the legislation has not been amended to reflect the changing trading environment in the modern world[25]. For instance, the giving of powers to the UK commercial Banks to regulate other banks ahs been illustrated to be a great failure in the attempt of letting the trading world be regulated by market forces. The polices created by the UK commercial bank has been cited for infringing on Banks where the administrators have little interest[26].
Chapter4: Effective Reinforcement of Property Law in UK
Intellectual Property Law in UK
The UK property law entails the commercial rules and regulations that govern the transaction that involves land, trust, personal properties, and intellectual properties. The origin of the intellectual property in the UK can be cited to have emerged during the Queen Elizabeth era. The intellectual law took place in the form of royal favours that were granted by or to the king. The royal favours involved letters or notes that could allow the king to receives or services from other kingdoms and vice versa.[27] The modern intellectual property in the US has developed over the years to include growth in the aspect of the contemporary business world. The UK intellectual property law has tried to include a different aspect of technological growth.
However, scholars have cited that the enforcement of intellectual property rights still requires more improvement. The intellectual property has been documented to borrow a lot from the constitution, which also draws from the treaties, judgment and statues. The failure of the intellectual property law has been cited to be linked to the backdated treaties which are no longer part of the modern trading world[28]. For instance, the law has been documented to fail to cover the aspects of trademarks and patent rights comprehensively. These have given loopholes to piracy, and which the UK courts have been able to handle adequately. Roy Good argues that the very statutes that form the commercial law in the market place are not up to date with the market place trends[29]. Hence, it is not possible for a law to govern an entity that is out of its scope. This aspect has also been supported by Atman & Jones. (2004) in their article[30].
State legislation
The state legislation has been cited to be a great point of a hindrance to the enforcement of intellectual property law. The state legislation concerning the property law has been considered to be messy and confusing[31]. There has not proper enlightenment to the end consumers and stakeholders on their rights as the owners of intellectual property law. This has contributed to information asymmetry among the players, which has led to an impediment on proper enforcement as the party which has more information, always wins. In addition, state legislation in regards to intellectual property rights has been cited for failing to encompass the rights with regards to design and innovation to meet the needs in the current global markets that are characterized by the application of tremendous technology.
Citing an example, to show a lead on how effective commercial law should look like, the authors have cited case laws such as Tesco Stores Ltd v Office of Fair Trading[32] and Football Replica Kit Case CA98/06/2003. The verdict in the Tesco Stores Ltd v Office of Fair Trading[33] denoted that it was unlawful for the two organizations to cooperate in unlawful pricing of the cheese[34]. The same veridic was arrived at during Football Replica Kit Case CA98/06/2003 case[35]. The authors recommend that application of such cases as a strong background of legislative case law that can be utilized to effectively enforce intellectual property rights and competition law[36].
Chapetr5: Impact of EU Laws on Domestic UK laws
The legislation between the EU and the UK law has been documented to be intertwined. This has highly affected the application and reinforcement of the domestic laws. The passing of the European Communities Act 1972 (ECA) has been cited to have given the room for the EU law to override the UK domestic law.[37] This scenario has led to the loss of enforcement of the UK law in the UK has cited by various authors. UK laws have been suppressed to refrain from undertaking any legal amendment that will result to competition with EU laws. This has been one of the factors that has been said to affect the enforcement of commercial law in the UK. Roy Goode documents that the commercial law has largely been suppressed by the EU law whereby any commercial undertaking that might not fit under the EU legislation is considered illegal. This has led to lack of market responsiveness with the current trade. The author argues that the clauses of the EU law themselves are made from old statutorily that might no longer be applicable due to passage of time[38]. Also, the bureaucratic nature of EU laws has been imposed to the UK commercial legal system. For instance, the time taken to reach a verdict led to the formation of commercial tribunal. However, even with the formation of commercial tribunal, the author still argues that the cost and time taken to resolve commercial disputes have made the victims to result to other measures of resolving the disputes[39].
The author cites the outdated nature of f Goods Act 1979 such as the Sale of Goods Act 1893 which is over 100 years old to show the outdated nature of the UK commercial legislation. Taking a case law of AstraZeneca AB v European Commission (C-457/10 P)[40], the judge declared that turning the clause of the EU law was next to impossible. This case law gives vivid illustration of the how the EU laws have led to ineffective enforcement of commercial law. Scholars documents that the expected break of UK from Brexit might lead to the improvement in some section of the commercial as the UK might need to repeal the section of the laws that fully relied on EU laws. On the other hand, the adoption of international trading standards has been cited as one of the ways that is being adopted to improve the laws governing the commercial world in the UK.
Conclusion
The analysis provides in this paper with regards to the enforcement of the UK commercial validate the statement that enforcement of commercial laws in the UK is ineffective. As discussed from different case laws cited and the research article written by different UK authors, it is evident that the UK commercial law is slow in responding to contemporary issues in the commercial world. Secondly, the enforcement of commercial law is expensive and time costly. The UK law is also accompanied with a lot information asymmetry where by the consumes are not well educated on the different constitutes of the law. The impact of EU law on overriding UK law has also been cited as a major factor that has affected the enforcement of UK commercial law. However, due the emergence of technology and the laws that govern the technological world, scholars argue that UK commercial system might be forced to improve the regulation that governs its commerce and the international world.
References
Aitman, D. & Jones, A. (2004) Competition law and copyright: has the copyright owner lost the ability to control his copyright? European Intellectual Property Review, No 26( 3) (pp. 137- 147)
AstraZeneca AB v European Commission (C-457/10 P)
Bradgate, R. and White, F., 2001. Commercial Law Legal Practice Course Guide.
Bradgate, R. & White, F. (2011) Commercial Law. 1ST edn. Oxford: Oxford University Press
Benson, BL. (1989) The Spontaneous Evolution of Commercial Law. Available from: http://coss.fsu.edu/economics/sites/coss.fsu.edu.economics/files/users/bbenson/spontaneous1989.pdf
Burton, D. (2013) ‘The four horsemen? The impact of four CAT judgments on the UK’s Competition Act settlement framework’, Comp. LJ No 12(3), (pp. 278-293)
Clarke, M. A., Hooley, R. J., Munday, R. J., Sealy, L. S., Tettenborn, A. M., & Turner, P. G. (2017). Commercial law: Text, cases, and materials. Oxford University Press
Calliess, G. P. (2017). Lex mercatoria. In Encyclopedia of Private International Law (pp. 1120-1129). Edward Elgar Publishing Limited.
Citron, P. (2013) ‘UK: anti-competitive agreements – food retail’ ECLR No 34(4) (pp. 63-N64)
Clarke, M. A., Hooley, R. J., Munday, R. J., Sealy, L. S., Tettenborn, A. M., & Turner, P. G. (2017). Commercial law: Text, cases, and materials. Oxford University Press.
Carter, D. L. (2004). Law enforcement intelligence: A guide for state, local, and tribal law enforcement agencies (pp. 136-37). Washington, DC: US Department of Justice, Office of Community Oriented Policing Services, p.18
Dabbah, M. (2009) Competition Law in the EC and UK. 4th edn. Cambridge: Cambridge University Press
Eric Jooris, E. (1996) Infringement of foreign copyright and the jurisdiction of English courts, European Intellectual Property Review, No 18( 3) (pp. 127- 148) 27
Football Replica Kit Case CA98/06/2003
Goode, R. (2010) Commercial Law. 4th edn. London: Butterworths
Goode, R. (1998) ‘Commercial Law in an International Environment: Towards the Next Millenium’ Commercial Law in The Next Millenium. 1st edn. London: Sweet and Maxwell. P. 96-104
Goode, R. (2001). Insularity or leadership? The role of the United Kingdom in the harmonisation of commercial law. International & Comparative Law Quarterly, 50(4), 751-765
Huschelrath,K. and Peyer,S. (2013) ‘Public and private enforcement of competition law: a differentiated approach’, W. Comp. 36(4), 585-613
John Ratliff, J. (2014) Major events and policy issues in EU competition law, International Company and Commercial Law Review, No 25( 3) (pp. 75- 97)
Kai-jian, Y.A.O., 2008. On Adam Smith’s” The Invisible Hand”[J]. Journal of Renmin University of China, 4.
Kum v Wah Tat Bank Ltd [1971] 1 Lloyd’s Rep 439 at 44
New Law Journal – Volume 123, Part 1 – Page 358, 1974
Pears, R. & Shield, G. (2013) Them Right: The Essential Referencing Guide. 9th edn. London: Palgrave Macmillan, p. 15
Razeen, S. (2006) Harmonizing International Commercial Law Through Codification, Journal of World Trade, No 40 (3) (pp. 425-451)
Sealy, LS & Hooley, RJA (2009) Commercial Law Texts Cases and Materials. 4th edn. Oxford: Oxford University Press,
Rodger, BJ. & MacCulloch, A. (2004) Competition Law and Policy in the EC and UK. 3rd edn. London: Cavendish Publishing
Sons, H. P. (2007). Table of Cases (continued).
Tesco Stores Ltd v Office of Fair Trading [2012] CAT 31; [2013] Comp. AR 23 28
Weir, T. (1974) ‘The Common Law System’, International Encyclopaedia of Comparative Law Vol II 14 Ibid.
Xu, C. & Pistor, K. (2007) Enforcement Failure under Incomplete Law: Theory and Evidence from Financial Market Regulation. Available from: http://eprints.lse.ac.uk/3748/1/Law_Enforcement_under_Incomplete_Law_Theory_and_Evidence_from _Financial_Market_Regulation.pdf
[1] Goode, R. (2010) Commercial Law. 4th edn. London: Butterworths, p. 8
[2] Clarke, M. A., Hooley, R. J., Munday, R. J., Sealy, L. S., Tettenborn, A. M., & Turner, P. G. (2017). Commercial law: Text, cases, and materials. Oxford University Press, p.36
[3] Clarke, M. A., Hooley, R. J., Munday, R. J., Sealy, L. S., Tettenborn, A. M., & Turner, P. G. (2017). Commercial law: Text, cases, and materials. Oxford University Press.
[4] Sealy, LS & Hooley, RJA (2009) Commercial Law Texts Cases and Materials. 4th edn. Oxford: Oxford University Press, p. 3
[5] Carter, D. L. (2004). Law enforcement intelligence: A guide for state, local, and tribal law enforcement agencies (pp. 136-37). Washington, DC: US Department of Justice, Office of Community Oriented Policing Services, p.18
[6] Burton, D. (2013) ‘The four horsemen? The impact of four CAT judgments on the UK’s Competition Act settlement framework’, Comp. LJ No 12(3), (pp. 278-293)
[7] Dabbah, M. (2009) Competition Law in the EC and UK. 4th edn. Cambridge: Cambridge University Press
[8] Sealy, LS & Hooley, RJA (2009),p16
[9] Bradgate, R. and White, F., 2001. Commercial Law Legal Practice Course Guide.,p.44
[10] New Law Journal – Volume 123, Part 1 – Page 358, 1974
[11] New Law Journal – Volume, p.358
[12] Sealy, LS & Hooley, RJA (2009),p.19
[13] New Law Journal – Volume, p.356
[14] 2 Dabbah, M. (2009) Competition Law in the EC and UK. 4th edn. Cambridge: Cambridge University Press
[15][15] Rodger, BJ. & MacCulloch, A. (2004) Competition Law and Policy in the EC and UK. 3rd edn. London: Cavendish Publishing
[16] Bradgate, R. & White, F. (2011) Commercial Law. 1ST edn. Oxford: Oxford University Press, p.405-430
[17] New Law Journal – Volume, p.357
[18] Xu, C. & Pistor, K. (2007) Enforcement Failure under Incomplete Law: Theory and Evidence from Financial Market Regulation. Available from: http://eprints.lse.ac.uk/3748/1/Law_Enforcement_under_Incomplete_Law_Theory_and_Evidence_from _Financial_Market_Regulation.pdf
[19] Kai-jian, Y.A.O., 2008. On Adam Smith’s” The Invisible Hand”[J]. Journal of Renmin University of China, p.4.
[20] Bradgate, R. & White, F. (2011), p.423
[21] Kum v Wah Tat Bank Ltd [1971] 1 Lloyd’s Rep 439 at 44
[22] Goode, R. (1998) ‘Commercial Law in an International Environment: Towards the Next Millenium’ Commercial Law in The Next Millenium. 1st edn. London: Sweet and Maxwell. P. 96-104
[23] Goode, R. (1998),p.101
[24] Weir, T. (1974) ‘The Common Law System,’ International Encyclopaedia of Comparative Law Vol II 14 Ibid.
[25] Huschelrath,K. and Peyer,S. (2013) ‘Public and private enforcement of competition law: a differentiated approach’, W. Comp. 36(4), 585-613
[26] Weir, T. (1974),p.50
[27] 6 Bradgate, R. & White, F. (20110,p.50
[28] Eric Jooris, E. (1996) Infringement of foreign copyright and the jurisdiction of English courts, European Intellectual Property Review, No 18( 3) (pp. 127- 148) 27
[29] Goode, R. (19980,p.105
on Competition law and copyright[30].
[31] Pears, R. & Shield, G. (2013) Them Right: The Essential Referencing Guide. 9th edn. London: Palgrave Macmillan, p. 15
[32] Citron, P. (2013) ‘UK: anti-competitive agreements – food retail’ ECLR No 34(4) (pp. 63-N64)
[33] Football Replica Kit Case CA98/06/2003
[34] Tesco Stores Ltd v Office of Fair Trading [2012] CAT 31; [2013] Comp. AR 23 28
[35] Sons, H. P. (2007). Table of Cases (continued).
[36] Burton, D. (2013) ‘The four horsemen? The impact of four CAT judgments on the UK’s Competition Act settlement framework’, Comp. LJ 12(3), 278-293
[37] Razeen, S. (2006) Harmonizing International Commercial Law Through Codification, Journal of World Trade, No 40 (3) (pp. 425-451)
[38] Goode, R. (2001). Insularity or leadership? The role of the United Kingdom in the harmonisation of commercial law. International & Comparative Law Quarterly, 50(4), 751-765
[39] John Ratliff, J. (2014) Major events and policy issues in EU competition law, International Company and Commercial Law Review, No 25( 3) (pp. 75- 97)
[40] AstraZeneca AB v European Commission (C-457/10 P)