COMPARATIVE PRIVATE LAW LEGAL TRANSPLANTS

1
COMPARATIVE PRIVATE LAWLEGAL TRANSPLANTS

• University of Oslo
• Prof. Giuditta Cordero Moss

2
Legal Transplants

• Circulation of legal models
• Reception of structure and principles of a legal
  system
• Borrowing of ad hoc legal rules

3
Reasons for legal transplants

• Imposition
• E.g. French law - colonies
• Prestige
• E.g. German law - pandectists
• Efficiency
• E.g English law financial transactions
• Chance
• E.g. Russian transition

4
Legal transplants and legal families

• Cross-family transplants
• Possible
• Legal families are classification of legal
  models, not legal models themselves
• Difficult
• Legal families present structures and principles
  that may not be compatible with rules generated
  under different structures

5
Multiple models

• Russian company law before JSC Act 1995
• Gov.Decree 601/90 JSC US model
• Enterprises Act 90 LLC German model

6
Multiple models criticism

• Transplant from common law into a civil law
  system
• Coexistence of models from two different legal
  families

• Classification describes to reality, not reality
  adapts to classification
• Main consequences richness of system

7
Incompatible models

• Decree 2296/93
• Transplant of trust into Russian system

8
Incompatible models?

• Trust common law
• Dual property formal ownership, beneficial
  interest
• Injunction to use property in best interests of
  beneficiary
• Tracing with third parties (if bad faith)
• Protection against trustees creditors

• Ownership civil law
• Unitary property
• Fiduciary obligations
• Only contractual liability

9
Transplant of different models

• Trust transplanted into various civil law
  systems Louisiana, Quebec, Scotland, Japan,
  Liechtenstein,
• Why is it incompatible with the Russian system?

10
Transplant of trust into Russia

• Context improvement of industry prior to
  privatisation.
• Shares transferred to banks against loan, banks
  manage companies, on maturity loan repaid or bank
  remains owner of company
• Art. 1 The institution of trust is transplanted
  into the civil law of the Russian Federation
• Art. 13Trustee responds of proper performance
  with all its assets

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Comparison of models

• Common law trust
• Transfer of formal ownership, creation of
  beneficial interest
• Injunction
• Tracing
• Separation from trustees assets

• Decree 2296 trust
• Transfer of total ownership
• Contractual liability of trustee in case of
  breach of fiduciary obligations

12
Incompatible models - conclusion

• Trust may be transplanted from common law to
  civil law
• Transplant of trust by Decree 2996 not successful
• Decree 2996 failed to see function, legal effects
  and remedies in the original system and
  differences in the own system
• Decree 2996 transplanted terminology, but not
  legal effects