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Article: Fiduciary duty in transitional civil law jurisdictions: lessons from the incomplete law theory

TitleFiduciary duty in transitional civil law jurisdictions: lessons from the incomplete law theory
Authors
KeywordsIncomplete law
Transition economies
Fiduciary duty
Law enforcement
Issue Date2002
Citation
Corporate Law: Corporate Governance Law Journal, 2002, p. 2-39 How to Cite?
AbstractIn Anglo-American law, fi duciary duty is the core legal concept to address confl icts among directors/managers and shareholders. The concept is developed and constantly refi ned by courts in the process of adjudication. By contrast, most civil law jurisdictions, including many transition economies, either lack the procedural rules that would enable parties to bring such cases to courts, or have not developed a suffi cient body of case law to determine the contents and meaning of this concept. This paper asks, whether courts should be allocated the right to defi ne and enforce fi duciary duty principles. Based on our theory of the incompleteness of law, this paper argues that when law is highly incomplete, but the expected harm can be contained and does not cause externalities, allocating lawmaking and law enforcement to courts is optimal. Breaching fi duciary duty is such an area, as harm is typically limited to shareholders of a given company. While courts in transition economies may have diffi culties living up to the task of exercising lawmaking rights in this area, we propose that there are few alternatives and that encouraging an active learning process should therefore be encouraged. We investigate emerging case law on the duty of loyalty in Poland and Russia and draw some comparisons to German case law.
Persistent Identifierhttp://hdl.handle.net/10722/138704
SSRN

 

DC FieldValueLanguage
dc.contributor.authorPistor, Ken_US
dc.contributor.authorXu, Cen_US
dc.date.accessioned2011-09-08T08:13:05Z-
dc.date.available2011-09-08T08:13:05Z-
dc.date.issued2002en_US
dc.identifier.citationCorporate Law: Corporate Governance Law Journal, 2002, p. 2-39en_US
dc.identifier.urihttp://hdl.handle.net/10722/138704-
dc.description.abstractIn Anglo-American law, fi duciary duty is the core legal concept to address confl icts among directors/managers and shareholders. The concept is developed and constantly refi ned by courts in the process of adjudication. By contrast, most civil law jurisdictions, including many transition economies, either lack the procedural rules that would enable parties to bring such cases to courts, or have not developed a suffi cient body of case law to determine the contents and meaning of this concept. This paper asks, whether courts should be allocated the right to defi ne and enforce fi duciary duty principles. Based on our theory of the incompleteness of law, this paper argues that when law is highly incomplete, but the expected harm can be contained and does not cause externalities, allocating lawmaking and law enforcement to courts is optimal. Breaching fi duciary duty is such an area, as harm is typically limited to shareholders of a given company. While courts in transition economies may have diffi culties living up to the task of exercising lawmaking rights in this area, we propose that there are few alternatives and that encouraging an active learning process should therefore be encouraged. We investigate emerging case law on the duty of loyalty in Poland and Russia and draw some comparisons to German case law.-
dc.languageengen_US
dc.relation.ispartofCorporate Law: Corporate Governance Law Journalen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectIncomplete law-
dc.subjectTransition economies-
dc.subjectFiduciary duty-
dc.subjectLaw enforcement-
dc.titleFiduciary duty in transitional civil law jurisdictions: lessons from the incomplete law theoryen_US
dc.typeArticleen_US
dc.identifier.emailXu, C: cgxu@hku.hk-
dc.identifier.authorityXu, C=rp01118en_US
dc.description.naturepostprint-
dc.identifier.spage2-
dc.identifier.epage39-
dc.identifier.ssrn343480-

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