City law is a global business

If you're working at a City law firm, understanding how the world's legal systems fit together is important. Hannah Langworth explains why

If you're working at a City law firm, dealing with different legal systems is unavoidable. You'll be told at law school that you can't advise on law on which you have not been specifically trained, which is correct - all substantive legal questions must and will be referred to lawyers in your firm's offices in other countries, or foreign counsel specially engaged for a particular transaction or case.

However, because of the international nature of the transactions and disputes that City law firms take on, the provisions and requirements of the laws of other countries will be part of your work. For example, on an M&A transaction the target group may well have subsidiaries in foreign countries whose assets and cashflows are backing the acquisition financing, or in finance departments you may be working on a deal with a foreign borrower or bond issuer. In both of these cases, junior lawyers will be involved in gathering corporate documents from the relevant foreign companies and dealing with other aspects of the impact of foreign legislation on the transaction. In litigation, there may be overseas parties involved in the dispute, or elements of it may be subject to determination under foreign law, and so some understanding of the operation of other legal systems may well prove useful.

Keeping things civil

Those who qualify as lawyers in England and Wales will become part of the worldwide family of common law legal systems, which derive the core of their traditions from English law. This family, whose relatedness can be traced back to the spread of the British Empire, includes the legal systems of Ireland (but note, not Scotland), Australia, some Caribbean nations, Canada, India, New Zealand and the US (with the partial exception of the state of Louisiana). These legal systems share principles and ways of working and, until recently, appeal courts. And ongoing similarities in substantive law and in training methods mean that it is relatively easy for Canadian or Antipodean lawyers to qualify to practice in England and Wales, which led to many a City managing partner jetting off on a recruitment trip to Toronto or Auckland during the boom years before the 2007 market crash.

But the majority of the world's legal systems are not common law systems. Many countries across Europe, South America and Africa are classified as civil law jurisdictions, that is, in broad terms, their legal systems derive in part from the continental European legal codes formulated in the nineteenth and early twentieth centuries, particularly the French Napoleonic Code or the German Civil Code, which in turn are derived in part from Roman law. However, it's important to remember that many, if not all, legal systems are a mixture of traditions and many may also be influenced by Islamic law, Chinese law or customary law.

Legal niceties

So what makes civil law different to common law? In very general terms, the distinction hinges around different conceptions of what law is. For a common lawyer, law is comprised of whatever provisions a legal system has determined by its own processes should be made law. For civil lawyers, however, legislation is tempered by the possibility of reference to external principles, particularly morality. This difference leads to one of the most obvious practical distinctions between many common law and civil law systems: civil law systems are often based on a code which can be interpreted afresh for each case, whereas in common law previous cases are usually binding; that is, civil law requires the judge to bring in principles outside written law where necessary, whereas the common law judiciary is usually bound by its previous decisions as the law recognises no external authority.

But how might these differences become important in practice? Here are just a few examples of where an awareness of the differences between common law and civil law will help you to make sure things go smoothly. Wondering why the legal opinion you've been sent by German counsel contains so much reference to academic opinion, which you never find in the English law equivalents that your firm produces? That's because civil law, with its facility of reference to external principles, places more weight on such scholarly commentary and opinion than common law. Why is your colleague in Milan so insistent that a document has to be notarised? That's because the process of notarisation is much more powerful and significant in many civil law jurisdictions, including Italy. Concerned that a definition in the Brazilian law document you're taking a quick look through is a lot shorter than the one in the English law document you've just drafted? No need to worry, this difference is often found because Brazilian lawyers can assume more extensive external interpretation of their documents.

In short, whether you like it or not, working at a global firm will give you a crash course in comparative jurisprudence. You will not be expected to - and should never - give advice on law other than that of the jurisdictions in which you're qualified, but you certainly will have to grapple with its practical implications. So the more you understand the differences, and the reasons for them, the better.

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