ACCA-LW (ENG): CORPORATE AND BUSINESS LAW

CHAPTER 1: LAW AND THE LEGAL SYSTEM

CHAPTER 1: LAW AND THE LEGAL

SYSTEM
LEARNING OUTCOME
At the end of the chapter, you should be able to:

TLO A1a : Define law and distinguish types of law.

TLO A1b : Explain the structure and operation of the courts.
ACCA-LW (ENG): CORPORATE AND BUSINESS LAW
CHAPTER 1: LAW AND THE LEGAL SYSTEM

1.1 Law and Distinguish Types of Law

Learning Outcome (ACCA Study Guide Area A)

A1a: Define law and distinguish types of law.

What is ‘Law’?

It is possible to describe law as the body of official rules and regulations, generally found in constitutions,
legislation, judicial opinions, and the like, that is used to govern a society and to control the behaviour of
its members, so law is a formal mechanism of social control. Legal systems have particular ways of
establishing and maintaining social order.

1.1.1 Definitions by Famous Jurists

There is no all-encompassing definition of law. Different scholars and philosophers have defined law in
various ways. The OXFORD ENGLISH DICTIONARY defines law as ‘THE BODY OF ENACTED OR CUSTOMARY
RULES RECOGNISED BY A COMMUNITY AS BINDING’. Basically, law refers to the rules and regulations which
govern human conduct. Failure to adhere to such rules may result in adverse consequences upon the
person who is in breach.

John Austin Prof. Herbert Hart Prof. Glanville

Williams
John Austin, an English jurist Prof. Herbert L. A Hart, an Prof. Glanville Williams
defined law as ‘A rule laid Oxford Professor of defined law as ‘the cement of
down for the guidance of an Jurisprudence defined law as society and also an essential
intelligent being by an ‘a system of rules, a union or medium of change.
intelligent being having primary and secondary rules’ Knowledge of law increases
power over him’; ‘A body of and views that ‘laws are rules ones’ understanding of public
rules fixed and enforced by a made by humans and that affairs. Its study promotes
sovereign political authority’ there is no inherent or accuracy of expression, facility
Province of Jurisprudence necessary connection between in argument and skill in
Determined (1832) law and morality’ interpreting the written word,
The Concept of Law (1961) as well as some understanding
of social values’
Learning the Law (1945-1982)

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1.1.2 Types of Law

The name United Kingdom (the UK) refers to the union of four
separate countries, namely England, Wales, Scotland and Northern
Ireland. Each region has its historical origins and hence UK has 3 legal
systems consisting of:
 England and Wales: English Legal System
 Northern Ireland: Northern Ireland Law
 Scotland: Scots Law

The descriptions from 1.1.3 to 1.1.6 deal primarily with the English Legal System of England and Wales.

Diagram 1.1.2: Types of law

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1.1.3 Common law

Common law is the body of law developed in The Courts of Chancery introduced the law of
England primarily from judicial decisions based equity in order to fill in the gaps of law that
on custom and precedent, unwritten in statute or common law failed to address (to mitigate the
code, and constituting the basis of the English harshness of the common law system). In
legal system. Judge-made law also known as addition, equity sought to avail a kind of
common law is law that has developed from flexibility in the law because the common law
judgments handed down in court. It is most presented a rigid system where writs governed
often used to make decisions about areas that are the system of judgment. Equity is fair and just
not included in Acts of Parliament. When using rule and looked into availing fair judgment to
common law judges decide cases along the lines individuals based on the rules that governed
of earlier decisions made in similar cases equity and the particular circumstances of the
('precedents'). These decisions set a precedent case. In addition, the law of equity in itself was
that must be applied to future cases on the same not a fully established system of law because it
subject. While the term common law is used to only acted as a remedy when the common law
refer to principles applied to court decisions, a failed to address certain legal issues.
common law system refers to a legal system that
places great weight on judicial decisions made in
prior similar cases.

Equity

There is a relationship between the common law and equity. It was ruled that, where there is a
conflict between the common law and equity, equity will prevail. The conflict was finally put to rest
by the setting up of Judicature Acts in 1873-75 where the Supreme Court could now administer both
rules of common law and equity. The merger incorporated the principles of both common law and
equity in order to avail a more wholesome system of judgment.

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The common law availed The law of equity brought

only monetary remedies about a system where the
when addressing grievances judges weighed the
brought forward by the particulars of the case to
parties of a case in order to determine whether to avail a
determine which party can remedy in terms of damages
claim victory of a case. This or provide a remedy that did
limited the ability of the not border on financial
courts of law to address other issues that fell grounds, such as an injunction, thus boosting the
outside the scope of monetary compensation. remedies available to the parties.

1.1.4 Statutory Law

Statutory law or statute law is written law set down by a body of legislature or
by a singular legislator. This is as opposed to oral or customary law; or regulatory
law promulgated by the executive or common law of the judiciary. Statutes may
originate with national, state legislatures or local municipalities. This is law
passed by Parliament which is the highest authority of law in England.

1.1.5 Public and Private Law

Public law affects society as a whole, while private law affects individuals, families, businesses and small
groups. The simple difference between public and private law is in those that each affect, as found in the
following examples:

Public Law Violation Private Law Violation

Affects society as a whole Issues between two or more people

If you saw a man run from a convenience If your neighbour filed a suit against you
store with a few pilfered products under his because your barbeque smoke travelled to his
arm, he is violating public law. He committed yard, you may be violating private law. You
the crime of theft, and that affects everyone. infringed on your neighbour's right to
peaceful enjoyment of his property.

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Public law Private law

Deals with issues that affect the general public or
Help citizens resolve issues between themselves
state society as a whole.

Public law is important in today's society as there Private law affects the rights and obligations of
exists an unequal relationship of power between individuals, families, businesses and small groups
the state and individuals. Public law provides and exists to assist citizens in disputes that involve
checks and balances, and to regulate such private matters. Its scope is more specific than
imbalances. This also means that the government public law and covers:
does not abuse its power over individuals and that  Contract law - governs the rights and
they use their power in a fair and proper manner. obligations of those entering into contracts.
Some of the laws that its wide scope covers are:  Tort law - rights, obligations and remedies
 Administrative law - laws that govern provided to someone who has been wronged
government agencies, like the Department of by another individual.
Education.  Property law - governs forms of property
 Constitutional law - laws that protect citizens' ownership, transfer and tenant issues.
rights as afforded in the Constitution.  Succession law - governs the transfer of an
 Criminal laws - laws that relate to crime. estate between parties.
 Municipal laws - ordinances, regulations and  Family law - governs family-related and
by-laws that govern a city or town. domestic-related issues.
 International laws - laws that oversee relations
between nations.

1.1.6 Civil Law

Covers areas: Is a branch of Public Law, deals with:

 Contracts Non-acceptable conduct against society:

 Family matters  Theft
 Negligence  Mischief
 Employment  Robbery
 Probate  Drugs
 Land Law  Riots

Contested will

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1.1.7 Distinction between civil and criminal law

VS
VS
Plaintiff/ Defendant/
Crown/State Accused Applicant Respondent

Criminal law Civil law

Deals with acts of intentional harm to individuals Deals with disputes between private parties, or
but which, in a larger sense, are offences against negligent acts that cause harm to others.
society.

Examples: Examples:
 Deliberate or reckless act that causes harm to Disputes between individuals or companies:
another person or another person's property  Over the terms of an agreement
 Who owns land or buildings
 Neglect a duty to protect others from such  Whether a person was wrongfully dismissed
harm. from their employment
 Challenges to decisions of administrative
tribunals
 Violation of privacy and safety of home’s
 Allegations of medical malpractice
occupants
 Applications for distribution of the estates of
deceased persons
Since crimes are an offences against society,
normally the State or Crown investigates and
Family law cases involving:
prosecutes criminal allegations on the victim's
 divorce, parental responsibility for children
behalf.
and/or spousal support
 division of property between spouses or
The police gather evidence and, in court, public
common law couples
prosecutors present the case against the person
accused of the crime.
Depending on the circumstances, parties may file
a lawsuit asking the courts to decide who is right.
It must be proven that a crime was committed
and, for most offences, that the person meant to
 The courts may dismiss a case, or if it is found
commit the crime. For instance, striking another
to have merit, the courts may order the
person is the crime of assault but it is only a crime
losing party to take corrective action,
if the blow was intentional.
although the usual outcome is an order to
pay damages - a monetary award designed to
make up for the harm inflicted.
 Parties retain a lawyer; or may choose to
represent themselves; gather evidence and
present the case in court.

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1.1.8 Differing standards of proof

Criminal Cases:
 More evidence is needed to find the accused at fault in criminal cases than to find the defendant at
fault in civil ones.
 To convict someone of a crime, the prosecution must show there is proof beyond reasonable doubt
that the person committed the crime and, in most cases that they intended to commit it.
 Judges and juries cannot convict someone they believe probably committed the crime or likely is guilty.
This gives the accused the benefit of any reasonable doubt and makes it less likely for an innocent
person to be wrongfully convicted and imprisoned.

Civil Cases:
 In contrast, evidences must be proven on a balance of probabilities - if it is more likely than not that
the defendant caused harm or loss, a court can uphold a civil claim.

Check Understanding

Topic 1.1: Law and Distinguish Types of Law

Learning Outcome (ACCA Study Guide Area A)
A1a: Define law and distinguish types of law.

Question 1

What is the definition of law?

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CHAPTER 1: LAW AND THE LEGAL SYSTEM

1.2 The Structure and Operation of the Courts

Learning Outcome (ACCA Study Guide Area A)

A1b: Explain the structure and operation of the courts.

1.2.1 The Hierarchy of UK Courts

The court system in England and Wales consists of the following courts:

Diagram 1.2: Structure of the UK Court System

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1.2.2 Judicial Committee of the Privy Council

The Judicial Committee of the Privy Council is the related to devolution. Some functions of the
court of final appeal for Commonwealth Judicial Committee were taken over by the new
countries that have retained appeals to either Supreme Court in 2009. The decisions from the
Her Majesty in Council or to the Judicial Judicial Committee of the Privy Council are highly
Committee. It is also the court of final appeal for persuasive but not binding on English courts.
the High Court of Justiciary in Scotland for issues

1.2.3 Supreme Court (Formerly known as the House of Lords)

In 2009 the Supreme Court replaced the House of

At the top of the hierarchy is the Supreme Court,
Lords as the highest court in England, Wales and
formally the House of Lords. Decisions made in
Northern Ireland. As with the House of Lords, the
this court are binding on all other courts. Until
Supreme Court hears appeals from the Court of
1966 it was bound by its own previous decisions
Appeal and the High Court (only in exceptional
however, this changed when the Lord Chancellor
circumstances). It also hears appeals from the
issued Practice Statement (Judicial Precedent)
Inner House of the Court of Session in Scotland.
[1966] 1 WLR 1234 which stated the intention to
Appeals are normally heard by 5 Justices
depart from previous decisions when it appeared
(formerly Lords of Appeal in Ordinary, or Law
right to do so. Although the Supreme Court is
Lords), but there can be as many as 9.
recognised as the highest English court, decisions
made in the European Court of Justice bind all UK
courts by virtue of SS 2 and 3 of the European
Communities Act 1972.

Decisions of the European Court of Human Rights

are not binding on UK domestic courts, however,
they are persuasive and a UK court can choose to
follow a decision if it considers it just to do so.

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1.2.4 Court of Appeal

The Court of Appeal consists of 2 divisions, the Criminal Division and the Civil Decision. Decisions of the
Court of Appeal may be appealed to the Supreme Court (formerly the House of Lords).

1. Criminal Division
The Criminal Division of the Court of
Appeal hears appeals from the
Crown Court.

2. Civil Division
The Civil Division of the Court of
Appeal hears appeals concerning
civil law and family justice from the
High Court, from Tribunals, and
certain cases from the County
Courts.

The Court of Appeal is below the Supreme Court in the hierarchical structure and is split between the Civil
and Criminal divisions. Decisions in both divisions bind lower courts and normally themselves but the Civil
division is subject to exceptions to this rule as defined in Young v Bristol Aeroplane Co. Ltd.
These exceptions are:

 Where there is a conflict between two previous decisions. The court must decide which decision to
follow and which to overrule.
 Where a previous decision has been overruled by the House of Lords (Supreme Court), the Court of
Appeal must follow the decision of the superior court.
 Where its previous decision was made in per ‘incuriam’ meaning ‘through carelessness’ i.e. that a
previous decision was made in ignorance of some authority which would have led to a different
conclusion.

It is acknowledged that in practise the Criminal division has more discretion in its obligation to follow
precedent, as the liberty of an individual is at stake. If it is apparent that a previous decision has been based
on either a misunderstanding or misapplication of the law, a court in the criminal division is not bound to
follow a previous decision.

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1.2.5 High Court

The High Court consists of 3 divisions, the Chancery Division, the Family Division, and the Queen’s Bench
Division. Decisions of the High Court may be appealed to the Civil Division of the Court of Appeal.

Types of Divisions Explanation

Chancery Division  Companies Court - deals with cases concerning commercial fraud, business
disputes, insolvency, company management, and disqualification of
directors.
 Divisional Court - deals with cases concerning equity, trusts, contentious
probate, tax partnerships, bankruptcy and land.
 Patents Court - deals with cases concerning intellectual property, copyright,
patents and trademarks, including passing off.

Family Division  Divisional Court - deals with all matrimonial matters, including custody of
children, parentage, adoption, family homes, domestic violence, separation,
annulment, divorce and medical treatment declarations, and with
uncontested probate matters.

Queen’s Bench  Administrative Court - hears judicial reviews, statutory appeals and
Division application, application for habeas corpus, and applications under the Drug
Trafficking Act 1984 and the Criminal Justice Act 1988. It also oversees the
legality of decisions and actions of inferior courts and tribunals, local
authorities, Ministers of the Crown, and other public bodies and officials.
 Admiralty Court - deals with shipping and maritime disputes, including
collisions, salvage, carriage of cargo, limitation, and mortgage disputes. The
Court can arrest vessels and cargoes and sell them within the jurisdiction of
England and Wales.
 Commercial Court - deals with cases arising from national and international
business disputes, including international trade, banking, commodities, and
arbitration disputes.
 Mercantile Court - deals with national and international business disputes
that involve claims of lesser value and complexity than those heard by the
Commercial Court.
 Technology and Construction Court (TCC) - is a specialist court that deals
principally with technology and construction disputes that involve issues or
questions which are technically complex, and with cases where a trial by a
specialist TCC judge is desirable.

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The Divisional Courts are located within the The High Court is bound by decisions of those
three division of the High Court, the jurisdiction courts’ superior to it. Although decisions by
of which is mainly appellate. They are bound by individual high court judges have a strong
the doctrine of stare decisis following decisions persuasive authority on other high court judges,
from the Supreme Court and the Court of Appeal. they are not binding on them. If two individual
Divisional courts are above the High Court in the previous decisions are at variance, it is generally
hierarchy and as such the decisions of these accepted that the latter decision should be
courts bind the ordinary cases of the High Court followed, if the latter decision considered and
and also themselves with the exceptions in civil provided grounds for not following the prior
cases as cited in Young. In criminal appeal cases, decision. This was established in Colchester
the Queen’s Bench divisional court may refuse to Estates v Carlton industries plc (1984).
follow previous decisions if they are judged to
have been made wrongly as in R v Greater
Manchester Coroner.

1.2.6 Crown Court

The Crown Court deals with indictable criminal cases that have been transferred from the Magistrates’
Courts, including hearing of serious criminal cases (such as murder, rape and robbery), cases sent for
sentencing, and appeals. Cases are heard by a judge and a jury. Decisions of the Crown Court may be
appealed to the Criminal Division of the Court of Appeal.

Crown Courts are subject to binding precedent from superior courts but do not create precedents
themselves and are not bound by their own previous decisions although their decisions are considered
persuasive authority. County courts do not bind any other courts and are not bound by their own decisions.

1.2.7 County Courts

County courts have civil jurisdiction only but deal with almost every kind of civil case. The county court is
involved in the following matters:

 Contract and Tort claims

 Equitable matters concerning trusts, mortgages and partnership dissolution
 Disputes concerning land
 Probate matters
 Miscellaneous matters – e.g. consumer cases
 Some bankruptcy, company winding-up

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The court upon receipt of a case allocates the case either to the small claims track, the fact track or the
multi-track for hearing.

1.2.8 Magistrates’ Courts

The Magistrates’ Courts deal with summary criminal cases and committals to the Crown Court, with simple
civil cases including family proceedings courts and youth courts, and with licensing of betting, gaming and
liquor. Cases are normally heard by either a panel of 3 magistrates or by a District Judge, without a jury.
Criminal decisions of the Magistrates’ Courts may be appealed to the Crown Court. Civil decisions may be
appealed to the County Courts. Magistrates courts do not bind any other courts and are not bound by their
own decisions.

1.2.9 Tribunals Service

The Tribunals Service makes decisions on matters including asylum, immigration, criminal injuries
compensation, social security, education, employment, child support, pensions, tax and lands. Decisions of
the Tribunals Service may be appealed to the appropriate Division of the High Court.

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1.2.10 Advantages of having a hierarchy in the court system

The advantages of having a court system with a hierarchy can be summarised as follows:

 It facilitates a system of appeals. The court hierarchy distinguishes between

higher and lower courts so that persons who are dissatisfied with the
decision of a lower court have an avenue to have the decision to be
reviewed by a higher court.

 It facilitates the application of the doctrine of binding judicial precedent,

which requires the lower courts to follow the decisions of the higher
courts, thus achieving greater uniformity in the application of the law.

 It facilitates specialisation in the judicial process. The higher courts which

are presided by more senior and experienced judges handle the more
serious criminal offences such as murder, and kidnapping and more serious
civil matters where larger sums of monetary value are involved. The lower
courts are left to handle the less serious offences and civil disputes
involving smaller amounts of monetary value.

 It results in greater administrative convenience, efficiency and cost

effectiveness. The practical effect of a court hierarchy is that it provides for
an extensive system of lower courts dispensing justice inexpensively in
local areas and superior courts in the main centres.

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Check Understanding

Topic 1.2: The Structure and Operation of the Courts

Learning Outcome (ACCA Study Guide Area A)
A1b: Explain the structure and operation of the courts.

Question 1
The Queen’s Bench Division deals mainly with common law. Which of the following statement is
not true?
A. Actions based on criminal law and constitutional law
B. Appeals from the county court
C. Appeals by way of case stated from the Magistrates’ Courts
D. Some appeals from the Crown Court

Question 2
Please state type of law for these situations below.

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1.3 Chapter 1: Summary

Diagram 1.3: Summary of law and the legal system

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1.4 Chapter 1 Check Understanding: Answer

Topic 1.1: Law and Distinguish Types of Law

Answer: The Oxford English Dictionary defines law as ‘The Body of Enacted or Customary Rules Recognised
by a Community as Binding’. Basically, law refers to the rules and regulations which govern human conduct.
Failure to adhere to such rules may result in adverse consequences upon the person who is in breach.

Topic 1.2: The Structure and Operation of the Courts

Answer 1: A
Answer 2:
Situation A: Criminal law
Situation B: Civil law

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