Business Law

Douglas Smith, Richard D Lawson, A.A Painter

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136004896
• Topic: Business
• Subtopic: Business General
• Index: Business

Bringing the book directly in line with the amended CIM Business Law syllabus, the book provides marketing students with a thorough working knowledge of the law on contract, sale of goods, agency, as well as the legal mechanisms for resolving commercial disputes, together with coverage of other selected topics which are of importance to marketeers and business in general.

1 The English legal system

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Introduction

The term ‘legal system’ has no specific definition. It is, however, generally understood as referring to the ways in which laws are made in a jurisdiction, the types of law which are made, the court structure, and the role and function of various personnel. This is the approach which is adopted in this chapter.

Although there are many areas where the position described is the same throughout the United Kingdom, this chapter is specifically devoted to the position in England and Wales.

Objectives

The first objective will be to make clear the role of Parliament in making laws, and the extent to which Parliament is sovereign.

Account will also be given of other sources of law, notably that branch of the law normally referred to as the ‘common law’. It will also be explained that, whatever its source, the law can be subdivided into various categories.

Given the position of the United Kingdom as a member of the European Union, a further objective will be to explain how European Union law is made, and its relationship to law having its origin solely within the United Kingdom.

Account will also be given of the court structure, the importance attached to previous court decisions within the English legal system (the so-called ‘doctrine of precedent’) of various legal personnel and of the legal profession.

Key concepts

• Law as derived from legislation and judge-made law
• Differing categories of legislation — Acts of Parliament and subordinate legislation
• How Acts are made
• Powers of House of Lords
• Differing categories of Act
• Equity as distinct from common law
• Distinction between civil and criminal law
• Categories of civil law
• Criminal and civil courts
• The doctrine of precedent
• Solicitors and barristers
• Law Officers
• The relationship between domestic law and European Union (EU) law
• Supremacy of EU law.

Legislation

By ‘legislation’ is meant law which is made by, or under the authority of, Parliament. Legislation is subdivided into Acts of Parliament, which is law made by Parliament directly; and subordinate legislation, which is law made under the authority of Parliament, usually expressed in an Act of Parliament.

Acts of Parliament

When going through the parliamentary process, the measure which will eventually become an Act is known as a ‘bill’ . Most such bills come from government departments and will have been drafted by officials known as parliamentary draftsmen. Bills can also be introduced by individual Members of Parliament. A ballot is held among the MPs for the right to introduce private members’ bills. Quite often, such bills do become Acts, though generally they need government support.

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Parliament is ‘sovereign’

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Parliament is not restricted in its powers to create, alter or repeal law. An Act of Parliament cannot be questioned in or by the courts but must always be applied by them. This is what is meant by saying that Parliament is ‘sovereign’ .

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‘Money’ bills must start life in the Commons

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Parliament consists of the House of Commons and the House of Lords, and a bill can be introduced into either House with the exception of ‘money’ bills. A bill is a money bill if it is so certified by the Speaker of the House of Common1s. The annual budget, eventually enshrined in that year's Finance Act, is the prime example of a money bill.

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Limited power of Lords to block legislation

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For a bill to become an Act of Parliament, it must satisfy the procedure of both Houses, which means essentially that it must pass through three readings in each House. The main work is done during the second reading. The first reading is the presentation of the bill in principle; the third reading is also usually a matter of form when the particular House approves the changes which have been made to the original proposal during the second reading.

Delaying powers of House of Lords

The powers of the House of Lords to delay the further progress of measures approved by the House of Commons was considerably restricted by the Parliament Acts of 1911 and 1940. The position can be summarized as follows:

• A money bill (see above) which has passed all its stages in the Commons, is to receive the royal assent without the approval of the House of Lords, unless it has been passed by the Lords within one month of it being sent to that House, provided that it was in fact sent to the Lords at least one month before the end of the Parliamentary session.
• The power of the Lords to reject any bill seeking to extend the maximum life of Parliament beyond five years remains unaffected.
• If any other category of public bill (see below) passed by the Commons but rejected in the Lords is passed again by the Commons in the next session of Parliament and is not passed by the Lords unamended (except for amendments approved by the Commons), the Commons may forward the bill for royal assent. The Parliament Acts further provide that this procedure can apply only when at least one year elapsed between the second reading of the bill in the Commons in the first session and the third reading in the Commons in the second session.
• The power of the Lords to block private bills (see below) is unaffected by the Parliament Acts.

A bill which has been through all its parliamentary stages receives the royal assent, whereupon it becomes an Act of Parliament. It is very rare for the monarch personally to give the assent. As a rule, the assent is notified to each House by the Speaker of the Commons and the Lord Chancellor (the Speaker's equivalent in the House of Lords) under the powers provided in the Royal Assent Act 1967.

Categories of Act

Acts are ‘public’ Acts if of general application, such as the Sale of Goods Act 1979. An Act is a ‘private’ Act if it deals purely with personal matters or matters specific to one area of the country. An example is The Letchworth Garden City Heritage Foundation Act 1995. There are some differences in parliamentary procedure in the case of a private bill than in that of a public bill.

A final category of Act is the ‘hybrid’ Act, being an Act introduced as having general application, but which affects the private interests of particular bodies or individuals. An example is the Channel Tunnel Act 1987. Part of the parliamentary procedure applicable to such bills is that of the private bill.

Subordinate legislation

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Most legislation is subordinate legislation

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It is extremely common for Acts of Parliament to give a government minister, a local authority or a public corporation the power to make regulations and to state the penalties for breach of such regulations. There is a vast amount of such ‘subordinate’ legislation, usually in the form of statutory instruments, of which there are often more than 2000 a year, compared with the 150 or so Acts of Parliament.

Control over statutory instruments

The Act of Parliament under which a statutory instrument is made will often require the draft instrument to be laid before Parliament to be the subject of a vote in favour (‘affirmative resolution’) before it comes into effect. An example is the statutory instrument made under the Fair Trading Act 1973, following examination of a course of conduct by the Consumer Protection Advisory Committee. If affirmative resolution is not provided for in the Act, the ‘negative resolution’ procedure has effect, which means that the instrument will come into force unless there is a vote against it within 40 sitting days in either House (Statutory Instruments Act 1946 and the Laying of Documents before Parliament (Interpretation) Act 1948).

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Committee scrutiny of instruments

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Parliament has established a joint select committee on statutory instruments which consists of members of both Houses and which reports to Parliament. Its terms of reference include consideration of every statutory instrument laid or laid in draft before Parliament, with a view to seeing whether the special attention of Parliament should be drawn to the instrument on one of a number of grounds, e.g. that it is obscurely worded, appears to impose charges on the subject or the public revenue, or purports to have retrospective effect unauthorized by the Act under which it was made.

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Instruments must be made as required by enabling Act

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If a statutory instrument is not made in accordance with the provisions of the Act under which it was made, it can be challenged in the courts and struck down.

Case example

R v Secretary of State for Health (1992)

Acting under powers contained in the Consumer Protection Act 1987, the Secretary of State made the Oral Snuff (Safety) Regulations 1989. The Act requires the Secretary of State, before making regulations, to consult such organizations as appear to him representative of interests substantially affected by the proposals. The applicants in this case were the only persons affected by the ban contained in the regulations and this, the court said, required the Secretary of State to ‘show a high degree of fairness and candour’ towards these applicants. Since he had concealed from the applicants scientific advice given to him which led directly to the ban contained in the regulations, an order would be made quashing the regulations.

Bylaws

Another type of subordinate legislation is the bylaw. These may be made by local authorities, public corporations, and certain other bodies authorized by Act of Parliament. Bylaws are restricted to the locality or undertaking to which they apply. Bylaws are not made by statutory instrument.

The Local Government Act 1972 states that bylaws must be made in accordance with ‘standard procedure’ except where the enabling statute provides otherwise. The procedure is that the bylaws are to be made under seal and submitted to the Secretary of State for the Environment unless some other party is specified. The ‘confirming authority’ then decides whether or not to confirm the bylaws which take effect one month after confirmation unless some other date is specified.

Bylaws can be challenged on the grounds that they are outside the powers conferred by the relevant Act under which they were made, ...

Table of contents

• Cover
• Business Law
• Full Title
• Copyright
• Preface
• Contents
• Introductory comments
• Table of cases
• 1 The English legal system
• 2 Contract
• 3 Sale of goods and supply of services
• 4 Agency
• 5 Consumer credit and consumer hire
• 6 Advertising and marketing
• 7 Product liability
• 8 Professional negligence
• 9 Negotiable instruments
• 10 Banking law
• 11 Insurance (non-marine)
• 12 Alternative dispute resolution
• 13 Arbitration
• Index