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Globalization of Law and Practices

Written by: Parikshit Dasgupta, ALMT Legal, Indo-European Consultants
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The term 'globalization of law' refers to the degree to which the whole world lives under a single set of legal rules. Such a single set of rules might be imposed by an international body, adopted by global consensus, or arrived at by parallel development in all parts of the globe. In today's world of increasing international trade and inter-dependence the need for transnational law has increased many folds. Since more and more countries, open their economy, either partially or completely, there is a growing need to recognize and work towards a uniform system of law. This process of globalization is evident in all facets of law. It is the intent of this paper, to bring forth the concept of globalization of law in regard to different facets and discuss the merits or demerits of such globalization and harmonization.

I. Globalization of Commercial and Contract Law

There are various connotations to the term 'Globalization of law'. It may be viewed as a concomitant of the globalization of markets and the business practices of the multi-national corporations that operate in those markets. There has been some movement toward a relatively uniform global contract and commercial law. It is well established that contracts are a kind of private lawmaking system. By that we mean that a contract may be defined as a law between the parties to the contract. The two or more contracting parties create a set of rules to govern their relationships, as laid down under the terms of their agreement. In international trade too, the parties enter in contracts and the contracting parties invariably agree to submit to a nongovernmental arbitration mechanism or the courts of some particular nation state, or both, to resolve contract disputes. They may also chose the governing law of the contract under which any contract dispute between them shall be resolved.

In today's world of inter-dependence and international commerce, there is increasing importance of growth of harmonization of international commercial law. Most of the countries have now recognized the need for a uniform, predictable and transparent system of law for encouraging foreign investment and international trade with other countries. As a result of this, the courts and law of most of the countries recognize and enforce the judgments of the others. Hence there is a tentative movement towards the formulation of transnational commercial law through contracts.

In the global context, because of the economic position of the United States and some of the countries of Europe, these countries substantially influence the process of globalization of law. The obvious reason being that they contribute substantially to foreign investments in other parts of the world and have a strong role to play in international trade. Other than American economic power, another reason for this is the receptivity of common law to contract and other commercial law. It is widely believed in Europe that European Community legal business flows to London because English lawyers are more adept than civil law lawyers at legal innovation to facilitate new and evolving transnational business relationships. For whatever reasons, it is now possible to argue that American business law has become a kind of global jus commune incorporated explicitly or implicitly into transnational contracts and beginning to be incorporated into the case law and even the statutes of many other nations.

II. Globalization of Public Law

Certain global commonalities in law develop from a universal, and apparently growing, popular distrust of government . The Government has undertaken many welfare activities and also expanded its role to the commercial front. The need to put appropriate checks on the Government has also increased. This has paved way for administrative law and now many nations have accepted the Rule of law and used it to check the Government. The world has unanimously recognized that appropriate checks are needed on the Government and there now exist certain fundamental principles that have been recognized as basic to all populations for checking the Government from abuse of power.

Today global community has recognized the need of transparency of, and increased public participation in, bureaucratic decision-making. it seems obvious that law is an available instrument for achieving greater transparency and participation. Globalization here refers primarily to the industrialized states. In the period from roughly 1960 to 1990, the United States went through a virtual revolution in administrative law. Much growth and innovation also occurred in Canada and Australia. It is alleged, that English administrative law revived in parallel fashion. Even in India drastic improvements were made in this field. Very recently, the European Community has begun to experience a vivid urge to make appropriate laws for keeping a check on the authorities.

In the Global context, the world over there seems to be efforts to have checks on Governments so that the basic rights of the population cannot be abused. In the 1960s, 1970s, and 1980s, American federal courts, seconded by Congress, created a new apparatus of administrative law designed to maximize both the participation of interest groups in the bureaucratic policy-making process and the obligation of bureaucracies to make public every bit of their fact gathering, analysis, and policy choice processes. Not only were enormous amounts of new administrative law generated, but there was also a steep increase in the judicial supervision of bureaucracies. The judges now demanded that the bureaucrats fully, completely, and publicly explain what they were doing and do so in such a way that the judge, a person totally devoid of technological training and knowledge, could understand. It is also clear that across that world attention is being paid to the use of law to achieve those goals. This concept has rapidly spread all over the globe and is now increasingly recognized in U.K. and India too. In India, we have land mark cases where administrative discretions and quasi-judicial functions have been checked and supervised by the Courts. The principles of natural justice are now acknowledged the world over and courts around the world are now giving effect to the two maxims of natural justice namely, Audi Alterem Partem and Nemo Debit Juris in Propria Causa. The countries around the world now openly acknowledge these two as pillars of public law. The import of these two maxim implies that no person shall be the judge in his own cause and that every person shall have a right to be heard before a order is passed against him.

III. Globalization of Protective Law

The constitutional rights movement is one aspect of a global movement that is based on the distrust of concentrations of power. The individual is seen as needing protection from all the larger forces that threaten to crush him, not simply from the governmental ones . Law is seen as one instrument for such protection. Thus, in speaking of globalization, we move from the realm of constitutional law to the realm of torts, product standards, consumer protection, and occupational health and safety. Of course, most legal systems around the world have always dealt with personal injury, fraud, and shoddy goods. However, with passage of time the 'caveat emptor' rule was replaced and the laws of consumer protection and investor protection were taken became more stringent. E.g. In the sphere business organization and finance there has been active improvisation in securities and corporate governance law. Globalization here refers to a worldwide increase of legal protection against the ill effects of technical, economic, and social devices too complex, distant, or powerful to make individual self-protection possible. The most recent manifestation of this movement is the great outburst of environmental protection law that is partially fueled by a concern with nature itself but tends to achieve its greatest impetus when that concern is coupled with putative injury to individuals from pollutants.

Global patterns are, however, far from uniform here. India has experienced a tort explosion in the form of landmark cases concerning CNG buses and the reallocation of Taj Mahal. Many other nations too have now under the wake of environment consciousness has started active legislations in this regard. In the securities market there has been a rapid law innovations for better investor protection, such as the ban on insider trading and committee reports on corporate governance. There has been an enormous, global flood of product standards and other consumer protection law, but not only are developments much faster in some nations than in others, but the substantive standards and rules adopted also vary widely.

Perhaps globalization is clearest and most dramatic in environmental law. As it became increasingly clear that the externalities of environmental degradation crossed national boundaries and that some of them, like ozone depletion, were truly global, parallel developments in national environmental law accelerated, as did efforts at multi-national and/or international environmental protection law. Given the global uniformity of the industrial technologies threatening the environment, a considerable substantive uniformity emerges even in national environmental rules.

We have been looking at the globalization of law along a number of vectors. The global distrust of hierarchical authority and concentrated public and private power generates growth in administrative law, constitutional, and other rights law, and in legal regulation of economic enterprise. The global desire to protect the individual generates growth in personal injury, consumer protection, environmental law, and even family law. The globalization of markets and business enterprise generates the growth of a worldwide law of business transactions. The global multiplication of exterior business relationships and the growth of arms-length regulatory styles fuel a growing demand for lawyers and their involvement in more and more social, economic, and political relationships. Thus in light of all the above, it may be inferred that there is an increasing need for a global mechanism of legal education, law enforcement and also harmonization of most of the transnational laws. Having stressed on the need for globalization, we need to adopt our domestic structure to be able to keep pace with the movement of globalization both in terms of legislation and in terms of legal education and practice.

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