Evolution of Spanish Commercial Law: From Roman Influences to Modern Uniform Law, Apuntes de Derecho Administrativo

¡Descarga Evolution of Spanish Commercial Law: From Roman Influences to Modern Uniform Law y más Apuntes en PDF de Derecho Administrativo solo en Docsity! CHAPTER 1: SPANISH PRIVATE LAW: HISTORY, SCOPE AND TRENDS Antonio Serrano Acitores September 2014 1 INTRODUCTION • Like all legal systems, the Spanish Private Law is substantially a product of history. • Therefore, social, political and economic circumstances converge in the formation of Private Law in each historical period. • Spanish Private Law has been historically divided into two disciplines, Civil Law and Commercial Law. 2. CIVIL LAW EVOLUTION • Two dominant influences have determined the evolution of Spanish Civil Law: Roman Law that the Roman colonization of the Iberian Peninsula brought with it; and Germanic Law that barbarian invasion imposed thereon after the collapse of the Roman Empire. • However, the present form of Spanish Civil Law is also intensely conditioned by another legal-political factor, i.e. the Iberian Peninsula fragmented into several kingdoms and territories that although sharing common roots, developed independently and separately their own civil legal systems. • The codification process began in Spain at the same time that in the rest of Europe (the Constitution of Cádiz proclaimed in 1812 introduced in Spain the ideal of codification) and entailed (i) the approval of a Civil Code in 1829, (ii) the proposal of a new project of Civil Code in 1851 (which failed due to an entrenched conflict among regions) and (iii) the final approval of the Civil Code in force published on 24 July 1889 and clearly inspired by the French Code. • The notion of Codes embodied a new drafting technique that, unlike previous collections of texts and rules, meant a simple compilation of existing rules, intended to create a timeless and perpetual systemized set of rules. I. HISTORY 2 5 II. PRIVATE LAW IN THE SPANISH LEGAL SYSTEM 1. INTRODUCTION • Legal teaching makes a common distinction between two main blocks of rules likely to categorize laws and regulations as Public Law or Private Law. • Public Law disciplines relationships between citizens and public powers, and between States or public authorities and each other. Therefore, rules governing the operation of the civil service and the performance of public services (Derecho Administrativo), the tax system (Derecho Financiero y Tributario), relationships between the State and the diverse Churches or faiths (Derecho Eclesiástico), State reaction against punishment of crimes (Derecho Penal), or relations among States in the international scene (Derecho Internacional Público) fall within the scope of the so-called Public Law. • Private Law should accordingly encompass all those laws and regulations that, not being included in the Public realm, regulate private relationships entered into by individuals and undertakings. Thus, Private Law embraces Civil Law (Derecho Civil), Commercial Law (Derecho Mercantil) and International Private Law (Derecho Internacional Privado). • Beyond that simple classification on an academic basis, both Public Law and Private Law form part of the entire legal system, a self-contained, autonomous and integrated complex of rules. As a result, Private Law should not be approached as an isolated element, but incorporated into the whole legal system and in permanent relation with neighbouring disciplines. 6 II. PRIVATE LAW IN THE SPANISH LEGAL SYSTEM 2. THE SPANISH CONSTITUTION • The current Spanish Constitution was promulgated in 1978 in the aftermath of the fall of the dictatorship following the death of the dictator Franco on 20 November 1975, and as the most valuable result of the exemplary process of political transition to democracy experienced in Spain. • Constitutional provisions are grouped in two categories, revealing a dual structure of the Supreme Text: – On the one hand, the so-called dogmatic part would comprise (i) the Preamble, which is a memorandum of understanding defining inspiring principles and founding values of the constituting society, (ii) the Preliminary Title (Articles 1-9), that contains basic constitutional principles configuring the political and territorial model and defining identifying marks of the Spanish State, and (iii) Title I (Articles 10-55) “On Fundamental Rights and Duties” under which fundamental rights, civil liberties and governing principles of social and economic policies are proclaimed. – On the other hand, the so-called organic or institutional part covers the remaining constitutional provisions (Articles 56-169) devoted to devising and regulating the operation of the executive, the judiciary and the legislature. • The Spanish Constitution, being the Supreme Text located at the apex of the regulation hierarchy, permeates the whole legal system. Accordingly, constitutional rules would outline the legal framework in which private relationships unfold. • As a matter of fact, the constitutional enshrining of a market-based-economy social model combining the proclamation of free competition (Article 38) with the recognition of public provision of economic activities (Article 128.2) and the eventual planning of the economy (Articles 38 and 131) underpin the playing field of private relationships. 7 II. PRIVATE LAW IN THE SPANISH LEGAL SYSTEM • A question to take into account is the following: it is important to determine the room left for fundamental rights in an scenario where private relationships take place under the dominance of private autonomy and freedom to deal. • Far from the general statement according to which constitutional principles prevail over the entire legal system and potentially filter through every private and public relationship, the question of the application of fundamental rights to inter privatos relationships, has long been debated by courts and scholars. In the forefront is the delicate balance between the important free autonomy principle inspiring Private Law rules and the equality and non-discrimination rights underlying constitution building. • Real conflicts between such principles and rights are frequently revealed in social an economic practice. For instance, the exercise of the so-called “right of admission” reserved by many business establishments open to the public has prompted significant number of interesting court decisions dealing with the role of fundamental rights in private relationships. For example, Spanish Constitutional Court judgment no. 73/1985, of 14 June held that a decision duly adopted by individuals on well-founded grounds aimed to protect a private entity`s interests is to be observed and does not amount by itself to an act infringing the equality principle. • Hence, it must be concluded that public powers are bound to observe the equality principle, but the autonomy of individuals and private entities is only limited by the ban on discriminating on grounds against constitutional public order, namely (among others) those prohibited by Article 14 Spanish Constitution 1978 (birth, race, sex, ideology, religion or any other personal circumstance). • As a consequence, private autonomy that also enjoys constitutional acknowledgment (Articles 1.1, 9.2 and 38), prevails in any relationship, insofar as predominance of individual will over equality is inherent in the concept of private autonomy. 10 III. SOURCES OF PRIVATE LAW 2. LAW AS A SOURCE OF PRIVATE LAW 2.1. Introduction. • Law encompasses all classes of regulations able to be laid down by empowered authorities. In this sense, the basic types of laws and regulations under Spanish law are the following: – The highest position under the Constitution is held by the law (Ley). Two classes of law are provided for by the Constitution: • Ordinary law (Ley ordinaria): that can be defined as any law other than an organic law. • Special or organic law (Ley orgánica): defined by two types of conditions: (i) it statutes dealing with fundamental rights and civil liberties, approving Autonomy Statutes of the Autonomous Regions or the general electoral system, and any other stated by the Constitution; (ii) any statute to be passed as organic law requires an absolute majority of the Congress for it to be approved in a final vote about the whole project. – At the same level as held by ordinary and organic law in the legal hierarchy, two further regulatory initiatives, characterized by emanating from the executive by express delegation of the legislative, are contemplated: • Real Decreto Legislativo: it is used to approve by the executive (i) articulated texts (textos articulados) implementing the delegation through a law of basis which will include the main guidelines or (ii) revised texts (textos refundidos) implementing the delegation through an ordinary law as a result of compiling dispersed provisions into a unique legal framework (Articles 82 and 83 Spanish Constitution). • Real Decreto-Ley: it also emanates from the executive, subject to subsequent validation or ratification by the legislative on grounds of extraordinary and urgent need (Article 86 Spanish Constitution). 11 III. SOURCES OF PRIVATE LAW • At the purely statutory level, the executive is empowered to establish regulations (reglamentos) by approving Reales Decretos that are adopted by the Spanish Council of Ministers, or Ministerial Orders (Órdenes Ministeriales) individually adopted by one or several Ministries. Regulations are to be subject to that prescribed by the law they develop. • Supervisory bodies in regulated markets, such as the Exchange Supervisory and Regulation Commission (Comisión Nacional del Mercado de Valores) or the Central Bank (Banco de España) are empowered to establish regulations for matters falling within the scope of competence (called Circulares de la CNMV and Instrucciones del Banco de España, respectively). 2.2. Regional legislation. • This notwithstanding, we must take into account that the Spanish Constitution 1978 drew a political and socio-economic picture described as “A State of Autonomies”, according to which the Autonomous Regions (with their respective Statutes of Autonomy) are recognized and invested with legislative, executive and judicial powers. • The resulting model of shared-legislative-powers between State and Autonomies directly impacts on the hierarchy of sources and argues for a delicate distribution of powers according to the matter regulated. • As far as Private Law matters are concerned, exclusive legislative power to regulate thereon is granted to the State in order to guarantee market unity and equal civil rights of citizens within the entire national territory (Article 149 Constitution). • State exclusivity over Civil Law matters is, nevertheless, qualified by the constitutional recognition of Autonomies’ power to modify an establish regulations for civil matters regulated by the State’s legislation and by the so-called Derechos Forales. 12 III. SOURCES OF PRIVATE LAW • The Commercial Law scene is, from a constitutional perspective, significantly different. Articles 148 and 149 Spanish Constitution bestow no powers to the Autonomous Regions on Commercial Law matters; far from it, several sections of Article 149.1 enshrine the exclusive competence of the State to regulate on commercial legislation, industrial property, financial markets, registration of vessels or land transportation. • Nevertheless, some Statutes of Autonomy have managed to attract to local authorities certain powers over commercial legislation. 2.3. Community Law: the influence of the European Union • Adhesion by Spain to the European Community in 1986 represented a significant change in the Spanish legal system, particularly in Commercial Law rules. A true Community Private Law, in particular focused on Company Law, Competition Law, Consumer Law or Financial Service Regulations, is identifiable. • The evolution of the European Community into the present European Union has entailed the intensification of a Community heritage composed of successive treaties, policy guidelines, derivative regulations (Directives, Regulations, Decisions, Recommendations) and case law of the European Court of Justice (hereinafter the “ECJ”). • This large set of rules forms a new and autonomous Community legal system that operates according to the following principles: (i) supremacy of European Union law and need to be interpreted on a uniform basis; (ii) the binding character of certain rules approved by EU bodies in order to guarantee the efficacy of the Common Market and the unity of Community Law; and (iii) the direct applicability of certain EU measures (namely, EU Regulations). 15 III. SOURCES OF PRIVATE LAW • To be deemed the very source of law, two main conditions may be fulfilled: on the one hand, relevant uses crystallize the fruit of a repeated and constant conduct in business trade; on the other hand, the general awareness of the existence and the binding character of that reiterated conduct is indispensable to qualify a repeated practice as a binding customary rule (opinio iuris). 4. GENERAL PRINCIPLES • According to Article 1 Spanish Civil Code, in the absence of applicable legal provisions or customary rules, general principles of law shall be applicable. Therefore, general principles of law are set up as subsidiary sources of the legal system which through “extralegal” criteria help to fill gaps, interpret rules or settle disputes. Despite their considerable usefulness for construing legislation and filling gaps, general principles are a very equivocal concept. 5. JURISPRUDENCE AND DOCTRINE • In conformity with the alignment of Spanish legal system with pure Civil Law models, court decisions are not among the sources of law, because they lack to a great extent both defining features of law, general character and abstraction; insofar as they intend to settle a dispute by providing a specific solution according to concrete circumstances. • This notwithstanding, Article 1.6 Civil Code entrusts the role of completing the legal system to the repeated opinions of the Supreme Courts (repeated in at least two decisions) when interpreting and applying the sources o law. Thus, jurisprudence plays a valuable role for the legal system, despite not being a real source of law. • Other eventual sources of law might well be worth noting: firstly, collective agreements on wages and work conditions for work matters (Article 37.1 Spanish Constitution); and secondly, scholars’ opinion and academic doctrine play a very important role for interpreting the law, but do not hold a position in the legal catalogue of sources of law. 16 IV. CIVIL LAW AND COMMERCIAL LAW 1. THE DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW • Spanish Private Law has been historically divided into two disciplines, Civil Law and Commercial Law, basically appearing in two separate codes (Civil Code 1889 and Commercial Code 1885), and perceived as two different branches of knowledge whose mutual relationship is based on a general-special rapport. • Commercial Law is indeed a “historical concept”, insofar as it emerged and progressively became distant from Civil Law spurred on by social and economic factors that were proving the inability of civil rules to face the needs of that historical reality. Since then, Commercial Law has evolved pursuant to historical circumstances and market exigencies. • The application of Commercial Law provisions is subject to a set of “commerciality” criteria provided for in the Commercial Code, but first interpreting and later applying such rules are not always easy tasks. • In fact, the line distinguishing Commercial Law from Civil Law is sometimes blurred; and sometimes dynamic, changing and moving because of three different phenomena: (i) the spreading of Commercial Law to rule new social and economic areas (from ruling only trade to regulating industrial and agricultural activities and even liberal professionals); (ii) the constant and parallel generalization of commercial institutions from the business realm to be used in non-business transactions (e.g. bills of exchange); and (iii) a contradictory and paradoxical slimming down of the scope of Commercial Law due to the increasing process of generalization by which special rules of commercial character become general rules to be applied to any situation, and falling accordingly within the scope of Civil Law. • As a consequence, the transfusion of Commercial Law solutions to the body of Civil Law demonstrates the higher efficiency of commercial rules for managing social interests. But above all, the generalizing trend is pressuring towards the unification of Private Law. 17 IV. CIVIL LAW AND COMMERCIAL LAW 2. CONCEPT AND SCOPE OF COMMERCIAL LAW • The scope of Commercial Law is supposed to be clearly delimited by the relevant provisions of the Commercial Code. Nevertheless, socio-economic factors and the need to understand commercial rules from a realistic viewpoint have devalued the importance of legal criteria. • Article 2 Commercial Code declares that the so-called “actos de comercio”, regardless of the condition of the involved parties and whether specified in the Code or not, shall be regulated by the Commercial Code provisions or, failing that, by the uses and practices generally observed in the place. • In our opinion, the old wording of the Code outlines an unreal Commercial Law realm defined by the elusive concept of “acto de comercio”. • The modern economy demands a completely different approach refocused on three characterizing elements: (i) the entrepreneur, (ii) the enterprise and (iii) the business activities carried out by the former in the market. • Therefore, Commercial Law should be described as the set of rules aimed at governing economic activity run by entrepreneurs in the market. • Market: physical or virtual location where goods and services are exchanged. • Such a modernized approach to Commercial Law is to be continually reassessed to internalize or dodge pressing, and often contradictory, trends that guide today`s economy (e.g. the incorporation of consumers, deregulation, public interventionism, globalization and self-regulation). 20 VI. TRENDS IN PRIVATE LAW 1. THE IMPACT OF NEW TECHNOLOGIES ON ECONOMIC ACTIVITY AND SOCIAL LIFE • The incorporation of new information and communication technologies into all areas of our society is considered to have given rise to a new society, the Information Society. • The Information Society is not static but a dynamic process, a process entailing a historical migration to a new space, the digital space. Individuals, goods, activities, ideas and spaces are migrating from the analogue world to the digital one, from the atoms world to the bits world. • Accordingly, the Internet hosts classrooms, playing fields, fora, meeting rooms, box offices and markets. The Internet infrastructure supports a new world where people live, teach and learn, discuss, play, buy and sell, compete and cooperate. The digital space has become a new field for running one of the most ancient activities of the human race, the exchange of goods and services, trade. Using an urban metaphor, the Internet reproduces the structure and the plan of a city, combining public spaces and private spaces, open places and closed ones. • New technologies have led to a shift from the “Age of Ownership” to the “Age of Access”; a transformation of “goods” to “services”; a reorganization of markets under network-shaped market spaces; a melting of cooperation strategies and competition ones to boost economic growth; and a definitive division of the world into two positions, connected or non-connected. • As far as the Law aims to rule social relationships, the advent of the Internet has represented a real challenge to the order of social life in a new world. For that reason, it makes sense to formulate the following question: “Do new facts need new laws?” Or perhaps, “technology changes, laws do not?” Some replies thereto will be provided throughout this course. 21 VI. TRENDS IN PRIVATE LAW 2. SELF-REGULATION, CODES OF CONDUCT AND INTERNATIONAL STANDARDS • Modern economies are experiencing an intense trend towards the use of self-regulation techniques. In fact, some legal systems have really incorporated self-regulation into their regulatory policy. Thus, European Directives and domestic legislation on electronic commerce for instance encourage the elaboration of codes of conducts. • Uniformity can also be achieved by approving international standards that, although they have a more technical character, carry out a valuable function by facilitating transactions, enabling certification and guaranteeing homogeneity where it is required. • Self-regulation entails a kind of decentralizing under an up-from-the-bottom model, inspired by the conviction that closer-to-the- market rules would better manage parties’ interests. Therefore, self-regulation implies a downward transfer of regulatory power from a centralized regulatory authority to “self-regulated organizations”. • Complexity and technical sophistication are characteristics of economic sectors that make self-regulation more advisable for efficient regulatory operation (financial markets, electronic commerce, marketing and advertising, biotechnology, and nanotechnology). • Self-regulation must be distinguished form the legitimate exercise of private autonomy: – Private autonomy is bidirectional: when negotiating, contracting, agreeing on conditions and terms, both parties are regulating their conducts. – Self-regulation is unidirectional: providers assume certain commitments and duties in favour of users, whereas no obligation is imposed on users. This notwithstanding, it is generally accepted the binding effect of a code of conduct as it is based on free will. Indeed, the theory of binding unilateral declaration is a convincing argument to explain to a certain extent the binding character and the economic function of codes of conduct and other self-regulation outcomes. • An overview of the electronic commerce realm will suffice to gauge the magnitude and the extent of the self-regulation movement in modern economies. For instance, a selected sample of Codes of Conduct approved in Spain concerning electronic commerce-connected activities (e.g. AENOR) can be consulted on: http://www.minetur.gob.es/telecomunicaciones/lssi/autorregulacion/Paginas/Index.aspx. 22 VI. TRENDS IN PRIVATE LAW 3. THE INCREASING ROLE OF “TRUSTED THIRD PARTIES” – FUNCTIONS AND LIABILITY OF GATEKEEPERS • The globalization of activities, the higher complexity of markets and the decentralization of power centres are factors that are undermining trust and certainty in commercial trade and socioeconomic relationships. • Information asymmetry and technical complexity in financial markets, anonymity and delocalization in electronic commerce, moral hazard, adverse selection or simply inability to discover relevant information for decision-making in goods and services markets, hamper an efficient functioning of markets. • Consequently, as exogenous mechanisms to generate confidence in markets, trusted third parties are acquiring increasing relevance in modern economies. The trust-generation role played by trusted third parties is backed by reputational, reasons of independence and professionalism. Auditors, classification societies for vessels, rating companies, e-marketplaces’ managers, inspecting entities, or electronic signature certification agencies are classes of trusted third parties (also called “gatekeepers”) operating in modern markets. Gatekeepers manage the flow of information to create confidence in market relationships where confidence is lacking. • Recent events in financial markets (and also in other industries) are nevertheless calling into question the prevention role expected to be played by gatekeepers. The participation of gatekeepers in contemporary financial scandals, the economic crisis, or even environmental catastrophes caused by the sinking of a vessel, is now under scrutiny. The role of auditors in the covering up of certain entrepreneurial frauds, the behaviour of rating entities in the subprime mortgage crisis, or the diligence of classification societies in the assessment of vessel seaworthiness are arousing certain liability concerns. • Two main strategies are being deployed to counter this crisis in confidence: – On the one hand, the proliferation of codes of conduct for self-regulating gatekeeper activity aimed to ensure reputational values and safeguard the integrity of markets (e.g. the 2008 revision of the IOSCO Code of Conduct Fundamental for Credit Rating Agencies). – On the other hand, the severe application of liability rules as a deterrent measure.