Firms, as societal entities, control in single economic, political, and legal environments. The legal environment is a follow of legislative intervention by the government (state) and the inevitable practices that are recognized and sanctioned by the inevitable law. Historically, the legal environment has ordinarily been nationally defined, although scholars have tried to group legal systems into varied groups, based on their similarities and dissimilarities.
A student of this topic would ordinarily argue that there are two basic groups of legal systems, which traditionally have been opposed: the Anglo-Saxon (Anglo-American) model and the continental European law. However, although both main systems of law may have their distinctive features listed, in fact there are far too many convergences in modern times. In the past the tasteless law (Anglo-Saxon) model would be predominantly based on the precedents, and the continental European law would be primarily based on the codifications.
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But, there is ever-increasing legislative operation in the Anglo-Saxon countries, with a number of codifications taking place as judiciary may uphold the consistency of court practice. In either system, a judge may take a stance to generate a precedent, but the sources of precedent would differ significantly. Growing empirical literature has attempted to prove the unabridged superiority of the Anglo-Saxon model. Although it is obvious that economies of Anglo-Saxon countries may be doing comparatively best than the others in the long run, it is not empirically corroborated that the increase sustained over a duration of time may be directly attributed to the features of the legal theory (legal environment).
Legal systems, although they may be classified into larger groups, are basically heavily influenced by national colors and experiences of legal development, especially in revolutionary environments (when there is abrupt turn in the development). Scholars learning legal environments would focus more, nowadays, on judiciary independence from the state and the politicians. It is believed that if the judiciary protects consistently asset rights, even from the state, the results of development will be better, and in the case-law system, judges historically have been more prone to uphold the sanctity of private asset rights.
Ex post judging is far best in responding to local information, rather than the application of abstract law, regulating the principles. However, increasingly the tasteless law countries are resorting to promulgating laws and codices, in order to best capture dissimilar areas of law. In the United States, the Uniform industrial Code (Ucc) is probably the best example. The increase in legislative operation may also be seen as a sign of upcoming struggle between judiciary and legislative power for sublime societal influence. Most recently the consulation on "political delegation" would suggest that it is essential to subsume, at least formally, all institutions of the state to the highest democratically elected body in the country (assembly, parliament, etc.), although that body is controlled exclusively by the politicians.
The literature has also defined a tasteless law theory as one in which judges exercise discretion to settle cases in independent and/or adaptive lawmaking ways, while in continental European countries the state would control judicial outcomes and the content of law as well. The basic factory of turn between the two wider legal groups has been the perception as to what extent the judicial convention may work on the future legal decision taken by the court. It is a fact that in Anglo-Saxon countries precedents are a source of law and they have to be regarded in the future when the act is required in a similar situation. However, although in the continental European legal theory judiciary convention is not a formal source of law, judges take into observation the prior convention in order to ensure consistency in acting in the court and the country.
In comparative law, the literature is quite often focused on a set of five parameters, like (1) judicial incentives; (2) exogenous legal human capital; (3) the processing of litigant facts into judicial error-reducing legal human capital; (4) the cost of producing evidence and legal arguments; and (5) the penalties (damages) levied in adjudication. Judicial incentives may be influenced by the way their independence is defined. Often in the diagnosis judicial independence features highly, especially as it is believed to be an leading feature of the Anglo-Saxon model, which contributed to its best results. In the U.S. Model, over 80 percent of serving judges are branch to some kind of election, reelection, or recall voting.
But even in the United States the upper echelons of judiciary are dependent on politicians who settle on their promotion to the highest offices. Similarly, in the continental European countries, the government may have a strong say in appointment of judges, especially in the case of higher courts. However, the very path of expert progression differs between European (especially French) and U.S. Judges. In Europe, judges are often career civil servants, who have opted for the judiciary profession roughly immediately upon graduation from the university; in the United States, judges are appointed from among practicing lawyers who have had more than 10 years of expert experience.
Comparative diagnosis of independence has shown more than a puzzle-judges should be independent, but the question is from whom? And, if one is independent, does it mean that he or she is also unbiased (objective)? Often it is assumed that judges, if not appointed by the government directly, will be essential of the government and look at the breaking of law made by the government in an unbiased manner. However, empirical study does not corroborate this claim. Some judges are more independent and unbiased in the way they control than others, but it cannot be generalized as to what contributes to that. Another leading feature is the connection between precedents and statutes.
Anglo-Saxon law is believed to be based on a set of more or less harmonious precedents (stare decisis), while the continental European legal practices are based on the interpretation of law and the application of the abstract legal (statutory) rule to a concrete situation. However, even in the latter case there is a high level of consistency in judiciary practices, as the higher courts have the right of cassation and therefore for the execution of judges it is leading that their decisions not be annulled and/or modified by the higher court. Therefore, even in the continental European legal systems, court practices are consistent, that is, jurisprudence constante.
At the far end, the issue is primarily behavioral-whether the judges will be vast or rather conservative (narrow) in their apprehension of laws. Some modern empirical study has clearly shown consistency of judicial behavior over varied systems. However, de jure legal convention is not a formal source of law in continental European legal systems, but, as already pointed out, will be seriously carefully in the process of application of law. In both systems the vast majority of judges will opt not to rock the boat.
The Legal Environments