COMPARATIVE PRIVATE LAW

LEGAL TRANSPLANTS

University of Oslo

Prof. Giuditta Cordero Moss

Legal Transplants

• Circulation of legal models– Reception of structure and principles of a

legal system– ”Borrowing” of ad hoc legal rules

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

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

Multiple models

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

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

Incompatible models

• Decree 2296/93:

• Transplant of trust into Russian system

Incompatible models?

• Trust – common law:– Dual property: formal

ownership, beneficial interest

– Injunction to use property in best interests of beneficiary

– Tracing with third parties

– Protection against trustee’s creditors

• Ownership – civil law:– Unitary property– Fiduciary obligations– Only contractual

liability

Transplant of different models

• Trust transplanted into various civil law systems: Louisiana, Quebec, Scotland, Japan, Liechtenstein,…

• Why is it incompatible with the Russian system?

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. 13:Trustee responds of proper performance with all its assets

Comparison of models

• Common law trust:– Transfer of formal

ownership, creation of beneficial interest

– Injunction– Tracing– Separation from

trustee’s assets

• Decree 2296 trust:– Transfer of total

ownership– Contractual liability of

trustee in case of breach of fiduciary obligations

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