Common Law, Civil Law and Legal Tech

Common Law vs Civil Law: are common lawyers a different beast than civil lawyers? Is the way we use legal tech going to be affected? In this blog, conveniently titled “Common Law, Civil Law and Legal Tech, we’ve jotted down some ideas for you to consider.

Comparative Law 101: common law and civil law contracts are different. 

If you’re already familiar with this, feel free to skip to the last paragraph. Otherwise, keep on reading, while we try to sum up some basic concepts. 

Common law contracts are different from civil law contracts: common law contracts are usually longer and more detailed. Civil law contracts tend to be shorter. Yes, probably you know that already. 

The generally accepted explanation is that (we are simplifying, this is supposed to be a blog post after all): Civil law drafters are able to rely on a well defined set of codified, default rules, that produce the background on which the drafter can create the contract. These rules are contained in a magic book that all continental jurisdictions call the Civil Code (Bürgerliches Gesetzbuch, Code civil, Codice Civile etc). The Civil Code contains a series of provisions that rule several  areas of private law – contracts, property, torts and so on. The Civil Code rules apply by default. 

As a consequence, if, when drafting a contract, the parties forget to indicate a certain scenario, the rules included in the Civil Code apply. This makes it possible, at least according to conventional wisdom, to draft very minimal contracts – everything that the parties did not define is going to be covered anyway by the application of one or more rules of the Code. 

“Common law contracts are usually longer and more detailed. Civil law contracts tend to be shorter.”

For instance, the force majeure clause – that exonerates the parties in case of a major, unexpected event- is present in all common law contracts but could be left out, with little or no consequence, from a civil law contract. 

The force majeure provisions will apply even if the agreement does not contain a force majeure clause: the parties’ responsibility to perform the contract would be waived in case of an unexpected event that makes performance impossible. On the contrary, in the common law style contracts, the parties have to specify (in the contract) events of force majeure that will exclude their liability for nonperformance. That should explain why the force majeure clauses in common law are often very long and cover as many events as possible. 

The differences in common law vs. civil law drafting became much more nuanced with the advent of big law firms – which have been imposing a sort of a multinational legal lingua franca, usually of the common law type. Long, detailed contracts became usual in civil law countries as well: in international transactions and particularly in the field of  M&A, it became the norm to use “common law style” contracts even if both parties, or companies, are continental. 

“Legal English has become the vehicle language of international business even in countries belonging to the civil law family”, (Martina Kunnecke

One reason: the ubiquitous anglosaxon law firms can impose their own language as a sort of lex mercatoria; but also, the absence of an effective international contract law that could uniform the law of contracts between two entities located in different countries has forced the parties to rely on longer agreements.

 Long contracts are necessary to define the obligations of the parties when the rules of a single code can’t be applied- and that’s always the case in international private law.  

 “A Way to Stabilizing Expectations Through Typified Solutions” as John Flood and Fabian P. Sosa once beautifully put it. 

 

Civil Lawyers Who Speak Common Law

Another phenomenon started to arise: the use of Common law language by Civil lawyers and together with it, the use of legal English by non-native speakers of English.

And when you put together common law legal concepts + a civil law frame of mind/legal culture + English as a second language, you get a very interesting mix. 

There are indeed, a number of terms and concepts that become problematic when used or interpreted by civil lawyers.

For instance, take the concept of warranty, which is often used in the sentence “represents and warrants”. For a common lawyer, this clause simply means that a party “states” something. For a civil lawyer, the word “warrants” brings to mind the whole universe of “product warranties” in the sale of good contracts. This gives rise to confusion: is the party providing a warranty or just stating something? 

“In contracts for the sale of goods, warranty can be used, as a matter of the law of warranties, to refer not only to a statement of fact but also to an obligation. The sentence is so confusing that Kenneth A. Adams, set to eliminate it completely from agreements, in favour of the more plain “states”.  

“There are indeed, a number of terms and concepts that become problematic when used or interpreted by civil lawyers.”

The penalty clause gives rise to similar confusion.  The civil law term “clause penale” (French), “clausola penale” (Italian) or “cláusula penal” (Spanish) looks deceivingly similar to “penalty clause”, but these clauses have -legally speaking different- meanings. Clause penale is a clause that determines the amount of damage one party has to pay to the other in case of non execution or breach of the contract (it is inserted in the contract so that the party does not have to actually prove the damages). The common law equivalent would be a “liquidated damage clause”. A penalty clause is a different kind of beast, and lawyers insert it in a contract with the only aim being to deter the other party, because the amount fixed is usually exorbitant compared to the actual damage suffered and penalty clauses tend not to be enforced by courts. 

Hence, the correct English translation of clause penale would be “liquidated damages clause” and not “penalty clause”. 

The examples could go on. The field is tricky as any lawyer who dabbles in two systems, legal translator or legal comparatist knows: tricky because it has to do with different legal systems, legal cultures, frames of mind, and lack of uniform law. 

 

Common law, civil law and legal tech

Right, for a while we forgot that we are on a legal tech blog. 

So here comes the question: is legal tech taking differences in legal cultures and languages into account? 

Some legal tech deals with words (document automation). Some legal tech relies on Natural Language Processing, which deals with syntactic and semantic structures of a language ( AI-powered document review, e-discovery) .

The point is that the divide between common law and civil law has some relevant consequences on the way we use legal tech. Legal tech is not a magic wand, it’s just a product. It can be AI-powered, but that doesn’t make it able to handle complex legal issues (yet). 

“The divide between common law and civil law has some relevant consequences on the way we use legal tech”

This is particularly important for document review technology – which is what we build

For document review software, the training phase is pivotal – not only because AI algorithms obviously rely on training to function – but because the type of contracts (i.e. lease agreements, service agreements, NDAs) and clients’ needs substantially differ from one another. 

When training a machine-learning document review software it is important to determine, together with the clients, what provisions the software should look at, and what kind of contracts it should analyze, but also: have the agreements been drafted in a common law or civil law system? Have they been drafted by civil lawyers or common lawyers? The trainers should be aware of the differences in the language used (i.e. “represents and warrants” doesn’t indicate a warranty clause; if I want to flag how much money the parties can be awarded, I should be looking for a “liquidated damages clause” not a “penalty clause” and so on). 

The interpretation phase is equally important. Once the training phase is over, the real game begins, and the software is used to extract provisions and obligations at scale from the agreements. Who is going to read the results and are they interpreted through a common or a civil law pair of lenses? 

People have started talking about algorithm bias focusing mostly on the ethical point of view and within reason, but algorithms may be biased when trained within a certain legal culture and applied to a different legal culture as well. Keeping it in mind during the whole process is important.