1

2

Forewords

I consider this publication to be a well-researched and impressive contribution

to legal study in the UK and the Slovak Republic.

Professor Mary K Driscoll, JD, Member of the California Bar,

Academic Dean, Northwestern California University School of Law

Once more, I have pleasure in commending the initiative of Slovkonsult in the

production of yet another well-researched and important publication for our

lawyers and law students.

Professor JUDr. Mojmír Mamojka, Csc.

Dean of the Law Faculty of the University of Mateja Bela, Slovakia.

3

Message from the Editors

This book follows on from the presentation of a paper by Edward Lestrade for the award of

the degree of doctor of juridical sciences of Northwestern California University School of Law

and the seminal work of the editors, authors and contributors of English & Slovak Business

Law - a guide for legal practitioners and law students ('ESBL'), in particular, Dr Nicholas

Tsagourias, Attorney at Law (Greece) of Bristol University UK, Dr Alan Dignam of Queen

Mary College, London University UK, Mr Hiren B Mistry, LLB, LLM, of the UK Bar, and Mr

Max Young, Head of Law at Luton University UK who provided the inspiration for the

production of the paper and the writing of the book. We are also grateful to Carolyn

Naughton and Sandra Warfield for their wonderful contributions in ESBL on the areas of

Land Law, Equity and Trusts which provided much of the materials for summarizing and

presenting these fields of law for the purpose of the comparative aspects of this book in these

fields. As good Slovak law materials in English are notoriously difficult to find, we are

especially appreciative of the skill, dedication and collaboration of our friends and fellow

lawyers: Mgr. Adrianna Tomanová, Advocate of the Slovak Republic; Mgr. Emília Čaprndová,

Magister of Law, Lawyer and Mgr. Katarina Knoppová, Magister of Law, Lawyer, who worked

with the producers of EBSL to make these materials available in the English language for

it and which materials were relied upon extensively in the production of this follow-on book.

Finally, we wish to record our thanks to Eva Lestrade for her assistance preparing this book

for publication.

Edward Lestrade & Peter Vrabel. 2005

4

Slovkonsult Law Publications is a division of Slovkonsult s.r.o., Law & Consulting, based in Bratislava.

It specialises in the publication of core legal and associated materials in English for both Slovak and

English lawyers and law students. Its aim is to increase understanding of the legal cultures in both

jurisdictions for the purpose of assisting Slovak and English lawyers to quickly appreciate the base

differences between their two systems in an environment of increasing international transactions

where informed legal advise is crucial.

About the Editors

Dr.Jur. Edward Lestrade

Edward has an LLB degree from Northumbria University Law School in the UK and was awarded a

doctor of laws degree (SJD) in comparative English and Slovak law in January 2005 by Northwestern

Californial University in Sacramento, USA. His doctoral work was supervised by Dean Michael P

Clancey, JD, SJD, Barrister (Middle Temple) and US Superior Court Judge (California) and Academic

Dean Professor Mary K Driscoll, JD, Member of the California Bar. Edward is a member of the

International Bar Association and has over 20 years experience covering a rich mix of international

business (Europe, USA and Asia Pacific), legal practice and consulting Edward is currently a

candidate for admission to the Bars of Asia Pacific and was honoured in the UK by Fellowships of the

Royal Society of Heath and Royal Society of Arts. He is the Managing Partner of Slovkonsult which

has a distinguished record of serving the legal and business communities in Central Europe and the

UK by providing law and business training and consulting. Its client list includes some of the largest

companies and law firms in Central Europe and increasingly some large UK companies.

JUDr. Peter Vr ábel

Peter is a leading Slovak lawyer and Managing Partner of Advisory Group Slovakia which has a

superior record of serving the largest companies in Slovakia and the new European Union countries in

the areas of commercial and company law in particular. Peter's law Master's and Doctoral degrees

were gained at the Comenius University in Bratislava, Slovakia and he is a Member of the Slovak Bar

and the International Bar Association.

5

CONTENTS

CHAPTER 1 - INTRODUCTION 21-36

· Purpose of the Book

· Usefulness & Importance of the Book

· Methods

CHAPTER 2 - THE COMMON LAW AND SLOVAKIA'S CIVILIAN SYSTEM 37-48

· Epistemology and Origins

· Relative and Comparative Institutions

CHAPTER 3 - COURTS, JUDICIAL SYSTEMS AND LAW SOURCES 49-81

· Slovak Court System

· Slovak Judges

· English Court System

· English Judges

· How English Judges Apply the Common Law

· Slovak Law Classifications

· English Law Classifications

CHAPTER 4 - EUROPEAN UNION LAW 82-101

· Introduction

· Nature of EU Law

· Sources of EU Law

· General Principles of EU Law

· European Union Institutions

· Sources and Application of EU Laws

6

· Breaches of EU Law

· Case Citation Notes

· Preliminary Rulings

· Judicial Review

· Action Against Member States

· The Four Freedoms Guaranteed by the EU

· Derogations

· Competition Law

· Slovakia and the EU

CHAPTER 5 - OVERVIEW OF CIVIL AND COMMERCIAL PROCEDURE 102-108

CHAPTER 6 - LAW PERSONNEL 109-114

CHAPTER 7 - ADMINISTRATIVE JUSTICE AND JUDICIAL REVIEW 115-123

CHAPTER 8 - SLOVAK AND ENGLISH COMPANY LAW 124-151

· Slovakia

· UK

· Special Types of Limited Companies

· Unincorporated Business Entities

· European Business Entities

CHAPTER 9 - EMPLOYMENT LAW 152-164

CHAPTER 10 BUSINESS LAW (SALE OF GOODS AND CONTRACTS) 165-193

CHAPTER 11 THE LAW OF TORTS AND SLOVAK LAW OF OBLIGATIONS 194-210

· English Law of Torts

· Defences

· Contracting Out - a note

7

· Interference with Goods

· Common Law Conversion

· Damages

· Slovak Law of Obligations

CHAPTER 12 HUMAN RIGHTS LAW 211-238

· Protection of the ‘Human’ Rights of Non-natural persons

in Civil matters & the European Convention on Human Rights

· The ‘Margin of Appreciation’

· Applications for Redress/ Complaints & Eligible Victims

· Non-natural Persons Limitations as victims

· Who can be the Subject of an Application under the ECHR

· Some ECHR Important Rights

· Independence of the Judiciary

· What the Courts & Legislators have to do to Comply with Art.6

· Procedure in the ECtHR

· Delay in Civil Proceedings & Article 6(1) of the ECHR

CHAPTER 13 ENGLISH LAW OF TRUSTS 239-241

CHAPTER 14 SLOVAK PROPERTY LAW 242-246

· Ownership

· Possession

· Cadastre

CHAPTER 15 ENGLISH LAND LAW AND EQUITY 247-258

· Estates

· Legal & Equitable Interests in Land

8

· Land Categories

· Types of Titles

· Interests in Land

· Trusts of Land

· Disputes Between Parties

· Mortgage/ Pledge

· Other Charges on Land

CHAPTER 16 SUMMARY OF KEY DIFFERENCES 259-261

9

BIBLIOGRAPHY & REFERENCES

ACTS & MEASURES

· Act of Parliament No. 132/1990 Coll. on Advocacy

· Bills of Exchange Act 1882

· Brussels Convention on Jurisdiction and the Enforcement of Judgments on Civil and

Commercial Matters 1968

· Contracts (Rights of Third Parties) Act 1999

· Charter of Fundamental Rights of the European Union of 2000

· Civil Code (Slovak)

· Civil Evidence Act 1968

· Civil Procedure Rules (CPR) UK

· Civil Procedure Code (Act No.: 99/1963

· Commercial Code (Slovak)

· Companies Act 1985

· Complaints Act No. 152/1998

· Constitution (Slovak) Act. No. 460/1992

· Employment Rights Act 1996

· Insolvency Act 1986

· Labour Code Amendment Act 2003

· Land Charges Act 1972

· Land Registration Act 1997

10

· Law of Property Act 1925

· Limited Partnerships Act 1907

· Misrepresentation Act 1967

· National Minimum Wage Act 1998

· Parliamentary Act No. 129/1991 of Coll. on Commercial Attorneys

· Partnership Act 1890

· Partnership Act 2000

· Rome Conventions on law applicable to Contractual Obligations 1980

· Sale of Goods Act 1979

· Slovak Law Act No. 157/1998

· Slovak National Council Election Act

· Social Security Contributions and Benefits Act 1992

· Supreme Court Act 1981

· UK Courts Bill 2002

· Torts (Interference with Goods) Act 1977

· Treaty on European Union of 1992 (Maastricht Treaty)

· Trusts of Land and Appointment of Trustees Act 1996)

· Unfair Contract Terms Act 1977

· Working Time Regulations 1998

CASES & AUTHORITIES

A

11

· Abas v Netherlands Appl 27943/94 (1997) EHRLR 418

· Agrotexim v Greece (1995) 21 EHRR 250.

· Cases 89, 104, 125-129/85, Ahlstrom Oy v. Commission (Wood Pulp Cartel) [1993] ECR I-

1307

· Airey v Ireland (1979 2 EHRR 305)

· Alcock v. Wraith [1991] 59 BLR 16

· Case 5/85, AKZO Chemie BV v. Commission [1986] ECR 2585

· Case 155/79, AM and S Europe v. Commission [1982] ECR 1575

· Case T-24/90, Automec v. Commission [1992] ECR II-2223

B

· Case 262/88, Barber v. Guardian Royal Exchange Assurance Group [1990] ECR I-1889

· Barnett v. Chelsea & Kensington Hospital [1968] 1 All ER 1068

· Case 170/84, Bilka-Kaufhaus v. Weber von Hartz [1986] ECR 1607

· Bolton v. Stone [1951] AC 850

· Case 67/74, Bonsignore v. Oberstadtdirektor der Stadt Koln [1975] ECR 297

· Case C-46/93, Brasserie du Pecheur v. Federal Republic of Germany, [1996] ECR I-1029

C

· Case 792/79, Camera Care Ltd v. Commission [1980] ECR 119

· Christians Against Racism and Fascism v United Kingdom (1980 21 DR) 138)

· Case 283/81, CILFIT v. Italian Minister of Health, [1982] ECR 3415

12

· Case 149/79, Commission v. Belgium [1980] ECR 3881

· Case 18/87, Commission v. Germany [1988] ECR 5427

· Case 7/69, Commission v. Italy [1968] ECR 423

· Case 24/68, Commission v. Italy [1969] ECR 193

· Case 40/82, Commission v. United Kingdom [1982] ECR 2793

· Case 165/82, Commission v. United Kingdom [1983] ECR 3431

· Case 124/81, Commission v. United Kingdom [1983] ECR 203

· Case 121/85, Conegate v. Commissioners of Custom and Excise Commissioners [1986]

ECR 1007

· Congrave v.Home Department [1976] QB 629.

· Case 6/64, Costa v. ENEL, [1964] ECR 585

· Council of Civil Servants Unions v. Minister for the Civil Servants [1985] AC 374

D - F

· Case 43/75, Defrenne v. Sabena [1976] ECR 455 Defrenne v Sabena (No. 2) (1976)

· Case C-177/88, Dekker v. Stichting Vormingscentrum Voor Jonge Volwassen [1990] ECR

I-3941

· Delcourt v Belgium ( 1970 1 EHRR 355)

· Case 252/78, Denkavit Futtermittel v. Minister fur Ernahrung [1979] ECR 3369

· R v. Devon CC ex p Baker [1995] 1 All ER 73

· Case 267/83, Diatta v. Land Berlin [1985] ECR 567

· Donoghue v. Stevenson [1932] AC 562 (HL)

· Elitestone Ltd v. Morris

13

(1997http://www.publications.parliament.uk/pa/ld199697/ldjudgmt/jd970501/elites02.htm)

· Engel v Netherlands (No 2) 1979) 1 EHRR 706)

· Case 32/75, Fiorini (née Cristini) v. Société Nationale des Chemin de Fer [1975] ECR

11085

· Cases C-6 and 9/90, Francovich & Bonifaci v. Italy, [1991] ECR 3277

· Funke v France (1993) 16 EHRR 297

G - I

· Case 12/81, Garland v. British Rails Engineering Ltd [1982] ECR 359

· GCHQ Case [1985] AC 374

· Glasgow Corporation v. Muir [1943] 2 All ER 44 (HL)

· Case C-249/96, Grant v. South West Trains Ltd [1998] ECR I-621

· Greenhalgh v Arderne Cinemas Ltd. [1951] Ch 286

· GJ v Luxembourg (Application No. 00021156/93 (1996)

· Haley v. London Electricity Board [1965] AC 778

· Handyside v United Kingdom (1986) 1 EHRR and Modinos v Cyprus (1994) 16 EHRR)

· Case T-30/89, Hilti AG v. Commission [1990] ECR II-163

· Case 85/76, Hoffman La Roche v. Commission [1979] ECR 461

· Case 48/69, ICI v. Commission [1972] ECR 619

· Case 11/70, Internationale Handelsgesellschaft mbH v. Einfuhr-und Vorratssttelle fur

Getreide und Futtermittel, [1070]ECR 1125

· International Fruit Co. NV v Commission (No 1) (1970)

14

J - L

· Jefferson v. Derbyshire Farmers Ltd [1912] 2 KB 281

· Jobling v.Associated Dairies [1981] 2 All ER 752

· Case 222/84, Johnston v. Chief Constable of the RUC [1986] ECR 1651

· Case C-450/93, Kalanke v. Frei Hausestadt Bremen [199995] ECR I-3051

· Cases C-267 and 268/91, Keck and Mithouard [1993] ECR I-6097

· Case 139/85, Kempf v. Staatssecretaris van Justitie [1986] ECR 1741

· Case C-285/98, Kreil v. Bundesrepublik Deutschland [2000] ECR I-69

· Langborger v Sweden (11179/84) [1989] ECHR 11 (22 June 1989

· Case 66/85, Lawrie-Blum v. Land Baden-Wurttenberg [1986] ECR 2121

· Les Verts v European Parliament [1986] ECR 1357 Case 68/88

· Case 53/81, Levin v. Staatssecretaris van Justitie [1982] ECR 1035

M - O

· Malmstom v Sweden (1983 ) 38 DR 18

· Marckx v Belgium (1797 2 EHRR 330).

· Case C-106/89 Marleasing SA v. La Commercial Internacional de Alimentacion SA, [1990]

ECR I-4135

· Case C-409/95, Marschall v. Land Nordhein [1997] ECR I-6363

· McGonnell v UK (2000) The Times, 22 February, Application No. 00028488/95

· McHale v. Watson [1966] 115 CLR 199

· Cases 100-103/80, Musique Diffusion Francaise SA v. Commission [1983] ECR 1825

15

· Case 136/79, National Panasonic (United Kingdom) Ltd v. Commission [1979] ECR 2033

· Case 322/81, Nederlandsche Banden-Industrie Michelin v. Commission [1983] ECR 3461

· Nettleship v. Weston [1971] 3 All ER 581

· Niemietz v Germany (1992) 16 EHRR 97. State

· Case 4/73, Nold v. Commission, [1974] ECR 491

· Notice on the Cooperation between National Competition Authorities and the Commission

OJ [1997] C 313/3

· Notice on Agreements of Minor Importance OJ [1997] C372/13

· Opinion 2/94 on Accession by the Community to the European Convention on Human

Rights [1996] ECR I-1759

P - S

· Case C-70/88, Parliament v. Council [1991] ECR I-2041

· Penfolds Wines v. Elliott [1946-47] 74 CLR 204

· Phillips v. William Whiteley Ltd [1938] 1 All ER 566

· Case 25/62, Plaumann & Co. v. Commission, [1963] ECR 95

· Case 130/75, Prais v. Council, [1976] ECR 1589

· Case 14/86, Pretore di Salo v. Persons Unknown, [1987] ECR 3719

· Price v.Sunderland Corp [1956] 1 WLR 1253

· Saunders v United Kingdom (1996) 23 EHRR 213) Saunders v United Kingdom (1996)23

EHRR 313

· Price v. Sunderland Corp [1956] 1 WLR 1253,

· Case 8/74, Procureur du Roi v. Dassonville, [1974] ECR 837

16

· Case C-13/94, P. v. S. & Cornwall County Council [1996] ECR I-2143

· Case 30/77, R v. Bouchereau [1977] ECR 1999

· Case 120/78, Rewe-Zentrale AG v. Bundesmonopolverwaltung fur Branntwein, [1979]

ECR 649

· R v. Devon CC ex p Baker [1995] 1 All ER 73

· Case 34/79, R. v. Henn and Darby [1979] ECR 3795

· Case C-292/89, R v. Immigration Appeal Tribunal ex parte Antonissen [1991] ECR I-745

· Case 63/83, R v. Kent Kirk [1984] ECR 2689

· R v. Secretary of State of Environment ex p Ostler [1977] QB 122

· Case C-213/89, R v. Secretary of State for Transport ex parte Factortame, [1990] ECR I-

2433

· Case C-48/93, R v. Secretary of State for Transport, ex parte Factortame, [1996] ECR I-

1029

· Case 138/79, Roquette Freres v. Council, [1980] ECR 3333

· Ruiz-Mateos v Spain (1993) 16 EHRR 505

· Case 237/85, Rummler v. Dato-Druck GmbH [1986] ECR 2101

· Rylands v. Fletcher [1868] LR HL 330.

· Scott v. London & St Katherine Docks Co [1865] 3 H & C 596

· Smith v Secretary of State for Trade and Industry (1999) [2000] IRLR 6)

· Case 56/65, Société Technique Miniere v. Maschinenbau Ulm GmbH [1966] ECR 235

T - Z

· Case 145/88, Torfaen BC v. B & Q plc, [1989] ECR 3851.

17

· Case C-415/93, Union Royal Belge des Societes de Football v. Bosman [1995] ECR I-

4921

· Case 27/76, United Brands v. Commission [1978] ECR 207

· Case 41/74, Van Duyn v. Home Office, [1974] ECR 1337

· Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, [1963] ECR

1

· W v United Kingdom (1987 10 EHRR 29

· Wagon Mound (No 1)[1961] AC 388

· Watson v. British Boxing Board [2001] 2 WLR 1256

· Webb v. Emo Air Cargo [1993] 1 WLR 49

· White Paper on Modernisation OJ [1999] C132/1

· Wieland v. Cyril Lord Carpets Ltd [1969] 3 All ER 1006

· W v United Kingdom (1987 10 EHRR 29

· Westminster Property Management Ltd (2000) 05 LS GAZ R 33)

· Yarrow v United Kingdom (1983) 30 DR 155

18

BOOKS & OTHER MATERIALS

· Centre for Work and Family Studies: “Fundamental Changes Made to Labour Code”.

http://www.eiro.eurofound.eu.int/2003/12/feature/sk0312103f.html

· Commonwealth Institute: http://www.thecommonwealth.org;

http://www.commonwealth.org.uk/;

· Companies House (UK): www.companieshouse.gov.uk

· Council of Europe (CoE – www.coe.int)

http://www.sas.ac.uk/commonwealthstudies/index.htm

· Council of Europe: www.europa.coe.fr

· Court Service (UK): www.courtservice.gov.uk

· Darbyshire P (2002), ' Eddey and Darbyshire on the Englis h Legal System', 7th Ed Sweet &

Maxwell.

· David, R & Brierley, J.E.C (1985), 'Major Legal Systems in the World Today',

Stevens & Sons, London.

· Department of Constitutional Affairs Website (http://www.dca.gov.uk)

· Dignam, A & Allen D (1998), 'Company Law and the Human Rights Act', Butterworths.

· Ernst & Young / Weinhold Legal (2004), 'Doing Business in the Slovak Republic.

www.ey.com./sk, www.eylaw.com/sk.

· European Court of Human Rights: www.dhcour.coe.fr

· European Commission. Trade Directorate General, 'European Union and Its Main Trading

Partners: Economic and Trade Indicators.',

< http://europa.eu.int/comm/trade/issues/bilateral/dataxls.htm >

19

· EUROSTAT (European Union Statistical Office). Free

Data. < http://europa.eu.int/comm/eurostat/newcronos/queen/display.do?screen=welcome&

open=/&product=YES&depth=2&language=en >.

· English Bar Council Website (http://www.barcouncil.org.uk)

· Galandová Miriam and Klutch, Martin (2004), 'Slovakia: Acquisition of Real Estates By

Foreigners', Tax Notes International, March 8, 2004.

· Gray & Gray (2004), 'Elements of Land Law', Butterworths 4th edition 2004

· Inland Revenue (UK) www.inlandrevenue.gov.uk

· IMF (International Monetary Fund).

<http ://www.imf.org/external/pubs/ft/weo/2004/01/data/dbginim.cfm >

· Law Society's Website (http://www.lawsociety.org.uk)

· Lestrade et al (eds.) (2004), 'Slovak and English Business Law - a guide for legal

practitioners and law students', Slovkonsult Law Publications.

· Lestrade E (2004), (Slovakia Chapter) in: 'Doing Business in Europe'. Sweet & Maxwell

(looseleaf)

· Messitte, Peter (Judge) (1999), 'Common Law v. Civil Systems', ISSUES OF

DEMOCRACY- an Electronic Journal of the U.S. Information Agency. Vol. 4, Number 2,

September 1999.

· Ministry of Justice of the Slovak Republic www.justice.gov.sk

· Ministry of Labour, Social Affairs and Family of the Slovak Republic at:

http://www.employment.gov.sk/en/

· Munková, Mariana. European Industrial Relations Observatory On-line, Bratislava

· Örücü, Esin (2000), 'Critical Comparative Law - considering paradoxes for legal systems in

transition', European Journal of Comparative Law. Vol. 4.1 (Internet Reference:

20

http://www.ejcl.org)

· PricewaterhouseCoopers (2004), '(Doing Business in Europe Brochure 2004)',

www.pwc.com/sk

· Privy Council: http://www.privycounciloffice.gov.uk

· Slovak Government Website: www.gov.sk

· Slovak Investment and Trade Development Agency

http://www.sario.sk/index_en.html

· Slovak Bar Website: www.sak.sk

· Štatistický úrad Slovenskej republiky (Statistical Office of the Slovak Republic)

· Tetley, William, Q.C. (1999), 'Common Law vs Civil Law', (Part 1)

http://www.unidroit.org/english/publications/review/articles/1999-3.htm

· UK Court Service Website (http://www.courtservice.gov.uk)

· Zuzana, Petrášová, (June 2003) “Amendment to Labour Code”.Financial Law News

Čechová Rakovský Law Firm:

http://www.fifoost.org/slowakei/recht/sfln/buch2002/node41.php or www.cechrak.sk

21

CHAPTER 1 - INTRODUCTION

PURPOSE OF THE BOOK

From the perspective of selected key aspects of substantive law with a focus on business

law (eg., company law, sale of goods, employment, etc.,), this book presents an analysis of

the cultural and practical differences obtaining between the civilian legal system obtaining in

the Slovak Republic (or, Slovakia) and the English common law system as followed in the

United Kingdom, in particular, 1England, Wales and Northern Ireland.

USEFULNESS AND IMPORTANCE OF THE BOOK

The Global Impact of the Enlarged European Union

Slovakia and its Central and Eastern European neighbours, that follow the civilian legal

system, are currently pursuing a program of rapid trade internalization as a result of their

joining the 'world stage' recently due to the enlargement of the European Union (EU) in May

2004 when Slovakia and many of its more developed Central and Eastern European

neighbour states, were admitted to membership of the EU.

The EU which was effectively established in 1993 as the European Economic Community

(EEC), is a union of twenty-five independent states based mainly on the European continent.

It was founded to develop, enhance and in some cases, create, political, economic and social

1 Unless otherwise expressly stated reference to 'English law' , or 'UK' law in this book relates to the law appertaining to England andWales.

22

co-operation between European states and before May 2004 was the biggest single market

in the world. From May 2004, its size swelled dramatically when ten countries including

Slovakia, acceded to it: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania,

Malta, Poland, Slovakia, and Slovenia.

2In its post-May state, the EU is expected to draw around 20% of world trade and as a result

of its enlargement now has a population of over 450 million and a gross domestic product of

around EUR9000 to 9400 billion. In that respect the EU presents more outstanding

opportunities for inter-EU and third country trade than ever before.

The majority of the EU's new members (Czech Republic, Slovakia, Estonia, Hungary, Latvia,

Lithuania, Poland and Slovenia) were formerly under communist rule as imposed by the

former Soviet Union and like Slovakia, follow the European Civilian system. However, the

repressive nature of communist rule and the previous exclusion of these countries from the

EU coupled with language issues, meant that lawyers and the business communities inside

and outside these countries have had little exposure and understanding of their respective

legal systems.

The Importance of Comparative Law

Introduction

2(a) EUROSTAT (European Union Statistical Office).

Free Data.<http://europa.eu.int/comm/eurostat/newcronos/queen/display.do?screen=welcome&open=/&product=YES&depth=2&language=en>. (b) IMF (International Monetary Fund). <http ://www.imf.org/external/pubs/ft/weo/2004/01/data/dbginim.cfm>(c) European Commission. Trade Directorate General. European Union and Its Main Trading Partners: Economic and Trade Indicators .<http://europa.eu.int/comm/trade/issues/bilateral/dataxls.htm>

23

For the purpose of this book, 'comparative law' refers to the presentation and analysis of the

legal framework of the jurisdictions of the UK and Slovakia with a view to identifying and

presenting key differences and similarities for the purpose of further investigation and

practical utility for jurists, legislators and the legal community in general. 3Traditionally,

research in comparative law is categorised as an academic and speculative field of activity

leaning towards the abstract. Today four distinct areas of comparative law are identifiable in

the areas of: legal philosophy (jurisprudence); legal history; culture and law and economics.

It is clear that in order to achieve a sound basis of the fields being considered in a

comparative law research, a study of comparative legal philosophy and culture is important.

In addition, matters of legal history (such as the emergence of a new legal order - the

European Union, for example) and economic aspects (eg., the emergence of new global

economic powers like the EU which consist of diverse nation states, are also important

matters impacting on any comparative study of jurisdictions within that environment.

Therefore the view that comparative law is a divided study as aforementioned does not assist

its utility as a field of study for understanding and informing the development of the law in

situations where diversities in legal systems need to be understood and bridged so as to

provide a development and working platform for necessary progress , for example, in 'mixed'

international jurisdictions (such as the EU). This book therefore views comparative law as an

essentially a tool of utility as opposed to one of an abstract character.

3 Esin Örücü (2000), 'Critical Comparative Law - considering paradoxes for legal systems in transition', European Journal of Comparative

Law. Vol. 4.1 (Internet Reference: http://www.ejcl.org)

24

As such comparative law may be usefully viewed as a methodology, or ontological tool for the

mining for knowledge which may link relative aspects of ostensibly disparate legal systems so

as to inform both and as such to aid in their development. The writer 4Esin Örücü, endorses

the view that: 'Comparative law understood as a science, necessarily aims at the better

understanding of legal data. Ulterior tasks such as the improvement of law or interpretation

are worthy of the greatest consideration but nevertheless are only secondary ends of

comparative research.'

This book rejects this notion, as to view comparative law as soley involved with legal theory,

or jurisprudence for the testing comparing of abstract aspects of legal theory, or a field of

study for merely assisting legal historians does not do justice to the overwhelming importance

to lawyers, academics and the study of law itself that the usefulness, insight and practical

utility for the day to day development of the law that comparative law is able to deliver.

In that regard, the aspect of a new legal system of 'European law', created by the European

Union (EU) as a new legal force binding some 25 nation states as a supreme authority, is an

interesting example of the usefulness and eclectic aspects of comparative law. Here in the

development of the legal structures and systems, the EU acknowledges by its constitution

that its laws shall be based on the legal systems of its members. This principle has thus been

reflected in the nature of its laws and how its judicial systems work. As such, the continental

systems (civilian systems) are applied together with principles deriving from the common law

4 Esin Örücü (2000), 'Critical Comparative Law - considering paradoxes for legal systems in transition', European Journal of Comparative

Law. Vol. 4.1 (Internet Reference: http://www.ejcl.org)

25

- eg., equity, torts and also aspects of judicial precedent, or stare decisis.

A comparative law study must include cultural aspects of the jurisdictions under

consideration - their history, political orientation, economic development and sociological

factors, including ethnicity. Cultural aspects play a significant part in comparative law. For

example, legal systems exist in the form of written law and unwritten laws, customs and

procedures and judicial and legislative institutions. Many such legal structures pass the test of

excellence in terms of the objectives to be achieved by laws made and existing and

presented and also by the quality and extent of laws passed by Acts of their legislatures.

However, there are huge gaps in many cases between their formal availability (in particular in

the post-communist countries of Easter and Central Europe) and their availability. In that

sense, a dry comparison of legal philosophies and structures without looking behind this and

integrating the study of culture whilst viewing the day to day operation of the relative legal

systems, would make comparative law an incomplete and therefore, unreliable field of study.

In particular, in the regions of Central and Eastern Europe, corruption at all levels of society

exist. This is not an aberration, but a way of life and freely acknowledged at all levels. It is

something that is an integral part of the culture of that region. It is not surprising therefore that

in the application of the law by the judicial systems in the region, 'unwritten law' plays based

on this cultural aspect is significant. Justice tends to be actually administered on the basis of

cultural orientation, economic power and sociological factors (eg., the problems of

discrimination facing the Roma communities in Europe). Judges, administrative and law

enforcement officers are not immune from these cultural norms and this has been a source

of much criticism from Western countries upon their Central and Eastern European

26

neighbours. That is why, it is submitted, comparative law as a mere philosophical study,

based on developing philosophical theories from 'surface' data gleaned from legal systems

which ostensibly follow worthy juristic norms, may be well be a useless exercise which may

not aid the development of a truly reflective academic presentation of the study. Therefore,

with respect to the foregoing, as it is considered that cultural aspects are critical to the study

of comparative law, these, where relevant, will be included in and bear upon generally, on the

materials developed in this book.

Comparative Law & the Relevance of the EU

The distinguished lawyer and academic, 5William Tetley acknowledges that mixed

jurisdictions and mixed legal systems, their nature and definition are worthy subjects of

interest and debate. He points, in that regard to the example of Europe, where as a result of

the establishment of the European Union, a more or less unprecedented number of legal

systems have been brought together under a single legislature which has then instituted laws

taking precedence over national laws.

Professor Tetley's analysis of the legal competence of the EU infers that the EU court has a

supervisory role to play in the courts of all the member states on all matters of law. However,

this is not really accurate as the EU court is only supreme as a judicial authority in matters

relating to the interpretation of EU law. Although the EU is a law-making body, this is a

political, rather than judicial judicial activity and in the main and the member nation states do

5 Tetley, William, Q.C. (1999), 'Common Law vs Civil Law', (Part 1) http://www.unidroit.org/english/publications/review/articles/1999-3.htm

27

continue to freely apply their own national laws and legal systems. For example, if a court in

Slovakia finds an individual liable for breach of contract, that individual would not be able to

appeal to an EU court unless the matter concerns an interpretation of EU law. Again, the EU

courts are not alternative courts of first instance for matters concerning the laws of the

member states which laws do not bear on any aspect of EU law.

Notwithstanding, the EU is a mixed jurisdiction as the decisions of its courts apply throughout

members states and its laws (regulations) become directly applicable without further ado in all

member states.

The EU's judicial and law-making processes follow Europe's two major legal systems - the

civil law of continental Europe and the common law of England, Wales and Ireland. As such it

is a unique modern-day institution and in context is a relevant area of study when comparing

the legal systems of the UK and Slovakia and a presentation of its formation and institutions

will be included in this book.

Civil v Common Law System

6The Civilian legal system together with the common law system comprise the two main legal

systems of the world. Civilian systems have their origins in Roman law and form the base of

the legal systems used in Europe, Asia and some other parts of the world. The common law

system, on the other hand, emanates from medieval England and is followed in the United

6 David, R & Brierley, J.E.C (1985), 'Major Legal Systems in the World Today', Stevens & Sons, London.

28

States, England and other countries formerly under British rule (including Canada, Oceania,

India and much of Africa).

The two legal systems are fundamentally different. Civilian legal systems, being based on the

written format of Roman, Canonical and Germanic law, characteristically, use legal codes.

Conversely, common law systems are a mix of legal codes (statutes) and other written and

unwritten laws which ultimately depend on the interpretation of judges in hierarchical priority

of the level of the deciding judge and/or court, for their effect. This system of judicial

interpretation and authority is normally referred to as the system of 'judicial precedent', or

'stare decisis'. In some cases, under this system, judges/ courts even have the power to set

aside statutes7.

In the context of the increasing significance of the EU in the business world as a result of its

recent major enlargement, this book addresses the perceived current need for the business

community in the region of the EU (particularly, the UK) as well as important trading partner

third countries, like the US, that follow common law systems, to have a greater mutual

understanding of the business law aspects of the civilian legal system obtaining in the new

member states of the European Union, of which Slovakia's legal system is typical. This

understanding will serve to promote smoother trading activities and avoid costly

misunderstandings in the progress of relative international commercial agreements.

The Relevance and Importance of Slovakia

7For example, in the leading English case of R v. Secretary of State for Transport ex parte Factortame, [1990] ECR I-2433 English

judges suspended an English statute on the ground that it was illegal.

29

8The Slovak Republic (Slovakia) is a typical, but important example of the new, post-

communist EU members. Its population is around five million and it has an area of

approximately 18,900 square miles. Its population mix comprises Slovaks (86%) and a

minority balance of Hungarians, Czechs, Romanies, Ukrainians, Germans /Austrians, Poles

and a smattering of expatriate US, Canadian and English nationals.

The country is generally referred to as 'the heart of Europe' as is it landlocked being more or

less circled by Poland, Austria, Ukraine, Hungary and the Czech Republic. The official

language is Slovak, however, due to the country's history and location, most Slovaks speak

several languages including German, Czech and Russian. Slovak is in the Slavonic family of

languages and is similar to most of the languages spoken in the other Central and Eastern

European countries and as such Slovaks have little difficulty in understanding the languages

of: Poland, the Czech Republic, Slovenia, Bulgaria, Croatia, etc..

Slovakia's brief history is that the first Slavs occupied Slovakia in the 5th and 6th centuries

AD. Their state, Samo's Kingdom, established in the 7th century became part of the Slavic

Empire of Great Moravia by the 9th century and up to the 11th century. Thereafter, Slovakia

was a division of the Austro-Hungarian Empire and in 1918, it joined with the Czech lands of

Bohemia and Moravia and formed Czechoslovakia. For the 20 or so years that followed, the

new state of Czechoslovakia, achieved significant economic development, and as such by

1930 was among the world's most successful industrialized countries.

However, just before World War II commenced, by pressure from the Germans, Slovakia

8

Slovak Investment and Trade Development Agency http://www.sario.sk/index_en.htmlLestrade. E (2004), Slovakia' section in: Doing Business in Europe. Sweet & Maxwell (looseleaf)

30

became an independent state, but at the end of the war in 1945, was re-integrated with

Czechoslovakia. From 1948 until 1989 Czechoslovakia was ruled by the communist regime

of the former Union of the Soviet Socialist Republic (USSR). However, its peaceful transition

to independence, called the 'velvet revolution', in 1989 overthrew the regime after a number

of peaceful mass demonstrations. The division of Czechoslovakia ensued in 1993.

Slovakia's central geographical position in Europe coupled with its economic aspirations,

political stability and membership of important world organizations like the North Atlantic

Treaty Organizations (NATO) makes is an important country in Europe for the purpose of this

book.

The 9 consultants and auditors, PricewaterhouseCoopers in their 2004 Report point out that

since Slovakia was established in January 1993, it has continued to move to a modern

market-driven economy and as a result of its efforts in that direction, in 1994 its strong export

performance improved its gross domestic product (GDP) by some 5 per cent and then by a

further 7 per cent in 1995 with similar yearly increases thereafter. These rates made it one of

the leading developing countries in Central Europe. In that respect, its economic

performance and aspirations coupled with its unique unique geographical position in Europe

makes it an important link country in a united Europe.

With regard to the usefulness of this book for Slovakia and its potential international business

partners, the distinguished Slovak academic, Professor Mojmir Momojka of the Comenius

University Law School in Bratislava, Slovakia said:-

9 Report of PricewaterhouseCoopers 2004 (Doing Business in Europe Brochure 2004) at www.pwc.com/sk

31

10"There have never been so many pressures put upon our legal system and law personnel

as in the past few years and will be in the years ahead. All this, due to Slovakia’s move to a

modern and progressive nation. As a result, it is more important now than before for lawyers,

educators, the business community and others to take close account of the significant

changes in our legal system and those of other significant jurisdictions, such as the United

Kingdom’s which have an important part to play in the progress of Slovakia’s

internationalization. As such, it is with pleasure that I encourage the dissemination of all

researches and information leading to the enrichment of legal education and training towards

this purpose, especially in the business field...”

The Relevance of the United Kingdom

The United Kingdom of Great Britain and Northern Ireland is a country in Western Europe

consisting of four states: England, Wales, Scotland and Northern Ireland. It has a population

of some 60,000,000 and is one of the leading countries in Europe and the world. It is member

of the European Union and its main language is English. The country is a parliamentary

democratic monarchy.

11 The Commonwealth of Nations and the Common Law

10 At 'Forewords' section - Lestrade, E, et al (eds) (2004), English and Slovak Business Law - a guide for legal practitioners and law

students. Slovkonsult Law Publications, Bratislava

11 Electronic references: http://www.thecommonwealth.org; http://www.commonwealth.org.uk/;

http://www.sas.ac.uk/commonwealthstudies/index.htm

32

In the 19th century, the UK was a dominant world-wide industrial and maritime power. It was

also a leader in the development of parliamentary democracy and in the advancement of

literature and science. Its influence and presence (the British Empire) once extended to over

a quarter of the world by due to the devastating effects of the two world wars, the UK's

prominence and economic potency was significantly negatively affected. However, in the 20th

century, the UK redeveloped itself into a modern and wealthy nation within Europe and what

used to be the British Empire has been developed into the Commonwealth (the

'Commonwealth of Nations') - a free association of former colonies and dependencies of the

UK with membership being based on common allegiance to the UK's Queen as Head of the

Commonwealth - a role akin to that of the ceremonial role of President of the Slovak

Republic.

In 2000, the Commonwealth had over 50 members enjoying a common inheritance of the

English language and literature, the common law and British systems of administration.

Citizens of Commonwealth countries have some distinctive rights in each other's countries,

for example limited voting and travel rights. Members of the Commonwealth include: United

Kingdom; Cyprus; Malta; Canada; most of the Caribbean; most of Africa; India, Pakistan;

Malaysia; Singapore; Australia; New Zealand.

The population of the Commonwealth is approximately 1.8 billion people, making up about

30% of the world's population: India is the most populous member, with a billion people at the

2001 census, while Pakistan, Bangladesh and Nigeria each contain more than 100 million

people. The land area of the Commonwealth nations equals about a quarter of the world's

33

land area, with Canada, Australia, and India each having more than 1 million square miles

(2,600,000 km2). Membership is normally open to countries which accept the association's

basic aims and members traditionally are required to have a present or past constitutional

link to the UK or to another Commonwealth member. Not all members have had direct

constitutional ties to the UK: some South Pacific countries were formerly under Australian

administration, while Namibia was governed by South Africa from 1920 until independence in

1990. Cameroon joined in 1995 although only a fraction of its territory had formerly been

under British administration (through the League of Nations mandate of 1920-46 and United

Nations Trusteeship arrangement of 1946-61). Queen Elizabeth II, the Queen of the UK, is

the nominal head of the organisation and since 1965 there has been a London-based

Secretariat.

The common law is generally followed in member countries of the Commonwealth and also

ex-colonies (like the America) who have not chosen to join it. The majority of Commonwealth

countries accept the Judicial Committee of the House of Lords' Privy Council to be the final

appellate court of their jurisdiction and indeed, decisions of the superior courts of the UK on

the application of legal principles, though not binding, may be cited in legal proceedings and

are highly persuasive and generally followed in the courts of Commonwealth countries.

This global and pervasive aspect of the common law, makes the results of this study even

more essential for the legal communities in emerging countries like Slovakia which follow

civilian law systems.

34

METHODS

The research for the book was conducted mainly by a survey of the available material on the

comparative aspects of English and Slovak so that the key differences in the general area of

substantive business law and associated legal areas. In that regard, it is to be noted that

materials in the English language in respect of the Slovak part of the research are virtually

non-existent and the only source of any authority available on this aspect is to be found in

Lestrade, E, et al (eds) (2004), English and Slovak Business Law - a guide for legal

practitioners and law students. Slovkonsult Law Publications, Bratislava ('EBSL') which

was used extensively in the research for this book.

EBSL was a result of over two and a half year's work of around 12 Slovak and English

lawyers and legal academics for the purpose of bringing together in one publication the major

substantive aspects of business law obtaining in Slovakia and the UK so as to enable lawyers

and business users of the publication to delve into this aspect deeper, depending on their

needs. As EBSL's managing editor, Edward Lestrade, designed and produced it, authored

some chapters, edited most and provided overall supervision and assistance to the other

authors, in particular, the Slovak authors, in respect of the translation of their work to 'legal'

English.

In line with the book's objectives, the Editors developed its theme by moving beyond the

mere description of the substantive aspects of business law relating to Slovakia and the UK,

by focussing on and presenting their comparative aspects. The materials are divided into

35

Chapters which present their respective topics in a comparative style. However, it is to be

noted that the legal systems of the two jurisdictions are far apart. This in many cases is to do

with the underlying philosophical and practical aspects of the application of their respective

laws. Therefore, in some instances (for example, with reference to the UK law of torts) it is

not possible to make an extended comparison. In such cases, the Editors will only and in

summary form, present the area of law which is considered important and which is not

included in the structure of the other jurisdiction's laws (Slovak, or English), so as to

contribute to the overall comparative analysis efforts of the book.

The book does not deal with the detailed procedural law concerned with international

commercial transactions between the two nations, but focuses on the comparative aspects of

their laws with the intention of highlighting key differences (and similarities) in the legal

systems obtaining in the two jurisdictions so that relatively informed choices may be made in

respect to the 'choice of law' aspect of international contracts and general dealings, etc.,

between the two nations and the respective development of their laws.

As business law is a wide field which is fed by diverse aspects of the substantive law ,

including, human rights, administrative law, property law and the law of trusts, it was

considered important to include these and other complementary areas for attention in this

book. However, the book is focussed towards the commercial legal aspects of comparison

and as such areas including sales of goods and contracts have been given great attention.

As mentioned previously, the law of the European Union is also included in this book and is

presented due to Slovakia's recent accession to the EU and the UK's relatively seniority as a

36

member of the EU. The intention being to highlight the great efforts required to be made by

the new members states, such as Slovakia, towards adapting to the new EU law regime.

Furthermore, as EU law is now an integral part of the legal systems of both Slovakia and the

UK, and European legal systems apply aspects of the legal rules and procedures obtaining

in both common and civil law, this gave another good reason for including the study and

presentation of EU law in this book (though in summary form) as a guide to the future

possible integration of the civilian and common law systems of Slovakia and the UK.

37

CHAPTER 2 - THE COMMON LAW AND SLOVAKIA'S CIVILIAN SYSTEM

12 EPISTEMOLOGY AND ORIGINS

Civil legal systems comprise written law whereby all that which is to be decided by a court is

to be found in a relevant code. This is a major difference from the common law system which

relies upon formally written and unwritten laws.

Key Civil and Common Law Differences

In that regard, the civil law and common law have different priority in application in that the

interpretation of the law by the legislature is first and foremost in civilian systems, whilst for

the common law and in the UK, this is left to the judges. Judge-made law as such in a

common law system is its underlying base.

According to 13Professor William Tetley, whilst the emphasis of a civilian system is towards a

relentless 'search for truth' by drawing from available materials (eg., cases, legal dictionaries,

etc.) for such rules that will assist in the clarification of the law, the common law adopts a

different approach. This approach is geared towards

finding materials that would enable certain laws not to be applied by the 'distinguishing' of

relevant judgments.

12 Judge Peter J Messitte (1999) 'Common Law v. Civil Systems'. ISSUES OF DEMOCRACY- an Electronic Journal of the U.S.

Information Agency. Vol. 4, Number 2, September 1999.

13Tetley, William, Q.C. (1999), 'Common Law vs Civil Law', (Part 1) http://www.unidroit.org/english/publications/review/articles/1999-3.htm

38

This adversarial approach stands in significant contrast to the ostensible flavour of civilian

systems. Common law dwells on 'patterns of fact' whereby cases are analysed for similar,

though not necessarily, identical, facts which are then further analysed in terms of the

governing principles deciding the relevant cases. These principles are then presented as

authoritative and having regard to the hierarchy and status of the common law jurisdiction

issuing them (eg., the UK House of Lords decisions, are almost universally followed, on

similar facts, in most common law jurisdictions).

In contrast the civil legal analyst focuses on legal principles in their entirety and considers

their historical origins, nature and sphere of application which would explain their application

and effects. The exercise is based on what is specifically written and deductive analysis is

not the preferred methodology for understanding the issues. In that regard, whilst the

common law would be applied in terms of specific rules for specific facts or family of facts,

the civilian system favours general principles applied to specific cases. Therefore, the

principle of 'stare decisis' which requires a lower court to follow the decisions of a higher

court, or authority, is alien to the application of civilian laws. In the civilian system, judgments

carry the force of 'authority by reason', as opposed to 'authority by seniority' under the

common law's 'stare decisis' system. Civilian laws tend to be based on general legal

principles which drive Codes and relative acts. These legal principles give mere guidance to

the judges in the interpretation of the law, but do not allow them to apply the law to the facts

in a uniform way as for the common law's 'stare decisis' system. As a result, civil law

decisions are more formally declared than common law judgments.

39

However, in that regard, the EU is unique as its judicial decision-making procedures follow

the civilian model and English lawyers are surprised at the brevity of the decisions of the

actual judgments. However, these decisions are really quite comprehensive as they are the

front-end of the reports of the European Court of Justice's Judge Rapporteur (a judge

charged with summarising the case for the judgment of the court) and that of the Judge

Advocate (the judge charged to analyse the case and to recommend a judgment to the

court). In that respect, the decisions from the EU court tend to be compatible with the

judgments made in common law/ English courts and in particular, it is to be noted that stare

decisis applies to the judgment of the EU court.

A further possible reason for the brevity of the decisions relate to the EU's diversity of

language as in that respect it is important to have judgments that can survive the translation

to many different languages without losing their key meanings.

Another reason for civil judgments being written in a more formal style than common law

judgments is a reflection on the civilian judges being professional judges who were not

necessarily practitioners and common law judges who are exclusively chosen from the ranks

of practising lawyers and who do not receive the more formalised training that the civilian

judges get.

Judgments of civilian courts are separated into the 'motifs' (reasons) and 'depositif' (order),

whilst for the common law, decisions are not so formally structured and it is generally up to

the judge/ legal practitioner to identify from the decision the 'ratio decidendi' (the part which is

binding on a lower court) and the 'obiter dicta' (things said in passing, which are of

40

persuasive authority on a lower court) of the judgment.

In civilian systems, decisions are written in the style where the legal principles are first

identified, then the facts analysed to determine their relevance to the principles and then

applied to them. For common law systems, the facts are extensively analysed and compared,

or distinguished from other cases and then the law is applied to them.

Furthermore, civilian codes aspire to comprehensively state the law in broad principles and

generally give no definitions, whereas common law statutes are 'judge-friendly', following and

enhancing the case law and providing aids for judicial interpretation such as comprehensive

definitions, etc..

Judicial interpretation in civilian systems is geared towards finding the intention of the

legislator through an analysis of the legislation in its entirety, whereas in common law

jurisdictions, although this method is used, but it is part of a barrage of rules and guides for

the construction of statutes which themselves may be set out in the particular statute, or

operate by virtue of judicial precedent. As such, civil law principles do not lend themselves to

predictability, whereas the common law system by virtue of the application of 'stare decisis'

provides a useful guide for citizens in their day to day lives.

In the common law system, judges have significant power and legitimacy to interpret the law

and effectively make it. This judge-made law is then binding on lower courts and can only be

made inapplicable by statute. However, once that 'overriding' statute became effective, it

would be then up to the judges to interpret it and to give effect to what they perceive to be the

intention of the law-maker. These rules then become part of the field of law as set out in that

41

statute which is the system of judicial precedent, or 'stare decisis'.

The common law system is essentially adversarial where the judge acts as a 'referee' and the

parties, through their legal counsel, fight it out. In this scheme of things, legal representative

have great scope for bringing innovative arguments before the court to support their client's

case. The general scheme of things is that questioning of witnesses is left to the legal

representatives. In the lower courts, or where the parties are unrepresented, the judge may

take an active role in the process of the trial.

In a civilian system however, the judicial process, in marked contrast, is inquisitorial with the

judge actively investigating the cases and conducting the questioning of the witnesses in a

'search for the truth'. In that scheme of things the lawyers 'assist' the judge in coming to a

determination that will help their client, as opposed to fighting it out between themselves so

that the best argument put before the court wins the day. Civil proceedings do not provide a

literal record of the proceedings, as in the common law system, instead the judge's notes and

determinations of fact make up the record.

Another important institution associated with common law systems is the jury trial. In all

serious cases where the liberty of the individual is to be determined by a court, the accused

may opt for, or may be required to (depending on the offence and the relative regulations for

the mode of trial) to be tried by a jury. Jury trials do not exist in civilian systems. However, in

some civilian systems (eg., Slovakia) lay judges sit with professional judges to hear cases.

The jury consists of a group of citizens, normally property owners and 12 in number, selected

at random by the court, to decide the facts of a case. In a trial by jury, the judge explains and

42

instructs the jury on the law, but it is within the remit of the jury to decide the facts of the case.

In that scheme of things, ordinary citizens, peers of the accused, decide on which party will

succeed in a civil case (for example, serious fraud, or defamation), and in criminal case, the

guilt or otherwise of the accused.

As jurors are not permanent fixtures of a trial, but are there to decide on the facts of the

case,, common law trials tend to be flowing and compact events so as not to bring to much

fatigue and inconvenience to the jurors (who are unpaid) which could affect the progress of

justice. Some trial last for days, some longer going to months in duration. Great store is given

to the oral testimony of the witnesses, however materials, such as documents are also used

as. Legal representatives are responsible for preparing the case and the trial judge does not

investigate the case before the trial.

On the other hand, in a civil system, there would be no single continuous trial. Instead,

separate court hearings may be held over an period which is not normally continuous.

Documentary evidence plays a greater role in the conduct of trials than the testimony of

witnesses. Further, the judge takes an active part in investigating the case before, during and

between hearings. He also actively questions witnesses. Again, appeals may be heard on

both facts and the law, and the appeals court is able to open the record of the court to look

at new evidence. In the common law system, appeals do not normally consider new

evidence and generally only review the decisions of lower courts of record for errors in law,

therefore no new evidence is normally received on appeal.

RELATIVE AND COMPARATIVE INSTITUTIONS

43

Political Systems and Government

In similarity with the United Kingdom countries, Slovakia enjoys a parliamentary democratic

system of government and its election 14laws ostensibly encourage free and fair elections.

However, unlike the UK, which adopts the 'first past the post' system (ie., the party which wins

the most seats in Parliament is elected to government), the country has used a proportional

system of parliamentary representation since 1990.

Slovakia's constitution, which is written, prescribes the form of government of the country,

how laws are made and the rights of citizens. Following the civilian system, it is a

comprehensive written document. The UK's Constitution performs a similar function,

however, unlike its Slovak counterpart, it is not written. The UK's constitutional law lies in

statute law; secondary laws made under the authority of statute law (delegated legislation);

laws made by royal prerogative (residual power of the monarch to make certain laws); case

law (decisions of judges on the interpretation of statute law, customs and conventions, etc. —

which form legal precedents) and also conventions/customs. Statute law is supreme over

judicial precedent. Conventions do not have statutory authority, but have binding force. For

example, the House of Lords is the highest court of appeal by convention. Again, the Queen

normally acts on the “advice” of the Prime Minister by convention.

Slovakia's Parliament is a single elected chamber of representatives (deputies), called the

National Council. At present, the Slovak National Council has 150 deputies elected under a

1480/1990 Slovak National Council Election Act

44

system of proportional representation and a general election is held every four years. A

parliamentary standing order stipulates that parties with seats be represented proportionately

in its committees. Under the Constitution, all legislative powers are vested in Parliament.

This is similar to the UK, with the exception that its Parliament consists of the House of

Commons and the House of Lords. The House of Commons consists of Members of

Parliament (MPs) who like Deputies, were elected by the general electorate. The House of

Lords consists of life and hereditary peers (senior members of the UK's aristocracy, normally

of some public distinction) who together act as a reviewing chamber for proposed laws

emanating from the House of Commons.

In both countries, Parliament has the sole and supreme legislative jurisdiction. It votes on all

laws, it reviews changes or amendments to existing laws. In Slovakia, Parliament must also

give its consent before any international agreements can be passed into law and on

proposed legislation (Bills and other measures) before it, Parliament usually needs a qualified

majority and a three-fifths majority of all members is required to pass laws of a constitutional

character.

As in the UK, in Slovakia, the government of the day's policies and activities are accountable

to Parliament. Deputies, like UK MPs, have the right to question members of government in

Parliament and Parliament may take a vote of no-confidence in the government. Deputies/

MPs can propose laws and have the authority to investigate facts and cases that are in the

interest of the general public by usually setting up an investigative committee from among its

members, which usually sits in camera. Post-investigation, the committee dissolves. In

addition to having investigative committees, the Slovak Parliament has political clubs (or

45

committees) consisting of at least five deputies, whose leaders examine government policies

and recommend parliamentary business. In the UK, this function is normally performed by

standing committees of the House of Commons, or both Houses in some cases.

Slovakia's President and Head of State (currently Ivan Gašparovie) is elected for five years

by the National Council (the country's effective ruling party). The UK's Queen, however, is not

elected and enjoys her position for life.

The Prime Minister (currently Mikuláš Dzurinda) is appointed by the President upon the

nomination of the National Council. In the UK, the Prime Minister is by custom is appointed

by the Queen if he/she is the leader of the political party with the most elected MPs which

enjoy a five year term of office before another general election must be called. As such, the

executive branch of government in Slovakia comprises the President (as Head of State) and

the government, which is similar to the UK. The Slovak President ,like the UK's Queen,

represents the country externally and internally. Unlike the Queen who is not elected and

enjoys her position for life, he is elected by direct popular vote for 5 years. The candidate for

the post of the president must be recommended either by at least 15 deputies from the

National Council or by a petition signed by at least 15 thousand citizens who are eligible to

vote.

Like the UK's Queen, the President’s role is mainly ceremonial and he possesses legislative

powers, an important one of which is that he must signs all laws for them to be effective.

Further, he may return proposed enactments and other laws to Parliament with his

46

observations up to 15 days after their submission to him. In that regard he performs a

similar function to the UK's House of Lords which acts on behalf of the Queen, as a reviewing

body for proposed laws by the House of Commons which is the UK's effective legislative

body. The President may also initiate proceedings in the Constitutional Court and may

dissolve Parliament if it rejects the government's program three times consecutively in a six-

month period. He is chief of the armed forces and may declare war by a decision of

Parliament and declare a state of emergency. The President also has power to call referenda

on the basis of popular petitions, or the request of Parliament. He may be prosecuted and

removed from office for treason only and prosecution may be conducted only by Parliament.

The Queen on the other hand, enjoys supreme authority and protection from prosecution.

She has all the powers accorded to the Slovak President, however, by convention, these

powers are exercised upon the advice of the government of the day. In that regard, she may

use her residual powers as monarch to dissolve Parliament and to call a general election in

the interests of the State.

Whereas the UK's Prime Minister, selects his Cabinet (which is the chief policy-making and

executive arm of the government) of senior ministers) and appoints all ministers, in Slovakia,

the government and its ministers are appointed by the President on the recommendation of

the Prime Minister. The Prime Minister is usually the leader of the majority party or the leader

of a majority coalition and is appointed by the President. A member of the government

cannot be elected a deputy in the National Council. When a deputy becomes a member of

the government, a substitute performs the functions of the deputy in the National Council.

The government of the day comprises the Prime Minister, three Vice-Prime ministers, and

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other ministers.

Unlike Slovakia, in the UK, all government ministers, with some exceptions must be Members

of Parliament (normally, of the House of Commons) and the effective government of the day

consists of the Prime Minister and his Cabinet.

As in the UK, the Slovak government implements legislation enacted by Parliament and

supervises the work of ministries and other institutions of the state. In addition to

implementing laws enacted by Parliament, the Slovak government decides on bills,

government decrees, implementation of the government's program, international agreements,

budgetary drafts, and high official appointments. The Slovak Prime Minister directs

government meetings where decisions are made by a majority vote of all members. In the

UK, the deliberations of the Cabinet are secret and the system of 'collective responsibility'

prescribes that the decision of any Cabinet Minister is supported by all. However, in its

sessions the Cabinet would be strongly influenced by the Prime Minister.

In contrast to Slovakia, the UK is not a single country, but consists of four countries, which

have their own court systems and legal professions comprising of three jurisdictions, namely:

England and Wales, Scotland, and Northern Ireland. It was instituted in 1801 and by 1992 had

achieved its present structure. Its Head of State is the Queen who exercises her authority as

monarch through the government on whose advice she acts by constitutional convention.

Effectively, she performs the same role as the President of the Slovak Republic.

The UK's legislature consists of two divisions in Parliament — the House of Commons, which

48

is made up of elected Members of Parliament (MPs) and the House of Lords, which consists

of hereditary and life peers (Lords) who are unelected. Hereditary peers are those who

inherited their aristocratic titles by birth, life peers are those who were

awarded theirs by the government, normally for distinction in public service. There

is a move by the government to reform the House of Lords so that it consists of only

life peers. The House of Commons initiates legislation (Bills), which are reviewed by the

House of Lords and then finally passed as an Act of Parliament by the Queen. The House of

Lords is not able to stop a Bill becoming an Act.

The government is made up of the Prime Minister who is normally the leader of the party with

the most MPs in the House of Commons, government senior ministers (normally called

Secretaries of State) who form a ruling council (called the Cabinet) and junior ministers .

Ministerial choices belong to the Prime Minister.

The United Kingdom does not have a written constitution. Its constitutional law lies in

statute law; secondary laws made under the authority of statute law (delegated

legislation); laws made by royal prerogative (residual power of the monarch to make

certain laws); case law (decisions of judges on the interpretation of statute law, customs and

conventions, etc. — which form legal precedents) and also conventions/customs. Statute law

is supreme over judicial precedent. Conventions do not have statutory authority, but have

binding force. For example, the House of Lords is the highest court of appeal by convention.

Again, the Queen normally acts on the “advice” of the Prime Minister by convention.

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CHAPTER 3 - COURTS, JUDICIAL SYSTEMS AND LAW SOURCES

SLOVAK COURT SYSTEM

Superior Courts

The Slovak legal system as a civilian legal system, uses legal codes rather than “common

law”. Fundamental to its application of its legal system is that all that is to be determined or

decided must by written. As such the common law system of judge-made law and judicial

precedent ('stare decisis') does not apply. However, the decisions of some courts are

regarded generally as “persuasive”. For example, the Slovak Supreme Court's decisions are

mostly followed by subordinate courts as they give guidelines for the interpretation of the law

and it is the responsibility of the Supreme Court to ensure that decisions are uniformly

applied. Again, laws passed by Parliament, governmental decrees, and regulations issued by

ministries may be reviewed only by the Constitutional Court.

Unlike the common law system, Slovak judges do not follow rules of statutory interpretation,

or a decision-making system that may be predictable. As such there is no guarantee that on a

similar matter, a different judge may choose to apply a different method of interpreting the

facts, evidence, or law to arrive at his/her conclusion. A desirable feature of any judicial

system is its predictability. This ensures that business people and citizens can pursue their

activities with confidence. In that respect, the civilian system tends to be weak, compared

with the common law.

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Slovak sources of law comprise: the Constitution; international agreements, which, if ratified

by the Slovak National Council, have priority over domestic laws; statutes enacted by the

Slovak National Council and the decrees of the government, individual ministries and local

authorities. Court decisions (precedents) are not a source of law, unlike the UK where, the

decision of higher courts must be followed by lower courts and as such become binding and

effective laws. However, such judicial precedents may be 'distinguished' ,- a party may hold

that the facts of the case are different to those which were the subject of the decision of the

higher court, or 'refused' in the event of a conflict of precedents, or similar event - this will be

explained in more detail later.

In Slovakia, Parliament is the supreme legislative power. However, the actions of Parliament

and its deputies are overseen by the judiciary, in particular, the Constitutional court. The

Constitutional Court is responsible under statute for reviewing the legality of laws passed by

Parliament and the decisions of administrative bodies that affect the rights of citizens and

their freedoms where no other court is empowered with that function.

The Constitutional Court is a judicial body which decides on matters affecting the

constitutionality of laws, government decrees and other legal rules. It has no equivalence in

the UK's legal system. Its judges are appointed by the President and they are nominated by

the Parliament. Its jurisdiction includes deciding upon administrative disputes, decisions of

central and local governments. Finally, it has a deciding say in interpreting the Constitution

and constitutional laws. It also reviews decisions ordering the dissolution or suspension of a

political party or political movement. As such it is a court of special jurisdiction and can be

51

distinguished from Slovak courts of general jurisdiction. It has no equivalence in the UK as a

judicial body.

Slovak courts of general jurisdiction decide civil and criminal matters, handle disputes under

the Commercial Code and review legality of cases decided by regional or local administrative

and other bodies with delegated powers.

Whilst in the Slovak legal system, courts have particular jurisdiction and are authorised to

decide on specified matter, in the English legal system, all courts decide on the law of the

land with the Crown Court ( and to a great extent, the Magistrates Court) being the only court

as such specialised to hearing only criminal matters. Further, for the sake of convenience,

certain courts (eg., the High Court) are divisionalised so that particular divisions may develop

expertise in matters of some complexity - eg., Patents Court, Technology Court. Additionally,

some courts, eg., County Courts, may only hear civil (non-criminal) matters up to a certain

financial limit (say where the amount of damages do not exceed UK Pounds 50,000.

In the English system, instead of particular judges, or courts dealing with particular areas of

law, say constitutional issues, these matters are in the remit of general court system and

judges are left to apply the law to particular instances in particular in 'courts of record', which

are normally the superior courts. In some courts, only certain ranks of judges may decide on

certain matters. For example in the High Court, only a 'Judge of the High Court' (a particular

rank of judge) may hear murder, or treason trials.

A “court of record" is a court or tribunal having attributes and exercising functions

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independently of the judge holding it and which proceeds according to the common law and

whose acts and proceedings are the subject of perpetual record. The English High Court is

such a court. Courts of record have an 'inherent' jurisdiction to make such orders, or

decisions as they see fit in the progress of justice and as such have a powerful role to play in

the development of the law in a common law system.

Following from and moving down from the Constitutional Court, the Slovak court system

consists of the Supreme Court, District Courts and Regional Courts. The Supreme Court is

the highest court of appeal for all matters, bar those which are of a constitutional nature. It

hears appeals against decisions of regional courts which are courts of first instance.

Regional courts hear appeals from district courts. As such Supreme Court decisions, though

not binding from the perspective of the common law system, are highly persuasive and are

normally followed by lower courts.

Slovak Constitutional and Supreme Courts are the highest-level courts. However, in the

English legal system the application of the common law and 'stare decisis' fulfills the intention

and purpose of these superior courts and whilst, in the English law systems, there is a

'supreme court' system which includes the High Court, the Crown Court (and the House of

Lords by convention), these courts do not perform the specific role of the Supreme and

Constitutional Courts of Slovakia and are courts, more or less, of general jurisdiction although

they tend to split their functions between criminal and civil (non-criminal) law matters (eg., the

Court of Appeal has a Criminal and Civil Division).

Lower Courts

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The District Court is a lower Slovak lower court and hears commercial, criminal, civil, family,

and labor relations lawsuits. Appeals made at the district level are referred to the regional

courts, which are courts of first instance as well as appellate courts for the Regional Courts.

There are also several arbitration courts in Slovakia. For example the Arbitration Court is an

independent body attached to the Chamber of Commerce and Industry. It has a wide-

ranging arbitral function.

Whereas the Constitutional Court deals primarily with administrative and constitutional

matters, other courts, 'state' courts, including the Supreme Court, hear disputes and

grievances among citizens and also act as military courts.

The courts usually comprise one judge or a bench composed of three professional judges.

The number of judges depends on the specification of the procedural code. Slovak courts

do not have a 'jury' system, but instead they have lay judges who sit with professional judges

on the bench in courts of the first instance and contribute to the decision-making process.

Court sessions are public.

SLOVAK JUDGES

The President of the Slovak Republic appoints and recalls judges on the basis of

nominations by the Judiciary Council of the Slovak Republic. They are appointed

without time restrictions. A citizen of the Slovak Republic who is eligible for election

to the National Council of the Slovak Republic, has attained the age of 30 years and

54

has a university education in law and sits and passes the required examinations for the

position of judge in Slovakia, may be appointed a judge. Unlike the UK system, a Slovak

judge does not have to be an experienced practitioners. He/ she is in a professional category

like a Notary, or Exekutor. A judge may not carry out other occupations other than the

administration of his or her own property, scientific, pedagogical, literary or artistic activity.

Unlike the UK where judges are among the highest-paid public officials, in Slovakia, they earn

comparatively little.

A judge may resign from his or her post by written notice to the President of the Slovak

Republic. Further, the President of the Slovak Republic, on a proposal of the Judicial Council

may recall a judge on the basis of a final judgment for a willful criminal offence, on the basis

of a decision by disciplinary senate for an activity which is incompatible with his position as a

judge, or if his or her eligibility for election to the National Council of the Slovak Republic has

ceased. A judge may also be recalled if for health reasons, or if he has attained the age of

65 years.

ENGLISH COURT SYSTEM

Superior Courts

In the English courts system, the Supreme Court of England and Wales consists of

the Court of Appeal, the High Court and the Crown Court (Supreme Court Act

1981). As mentioned previously, English courts tend to have a divided function depending on

whether the matter to be tried is 'civil' or 'criminal' in nature. Here 'civil' refers to any non-

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criminal matters.

Criminal Courts

Crown Court

The Crown Court is a single court sitting in various parts of England for the

criminal trial of adults. It is a part of the High Court of England and Wales and an appeal

court for Magistrates’ court by way of case stated (written application only). Trial is normally

at the location where the offence allegedly occurred. For offences abroad, there is no

jurisdiction of the English courts. Appeals — lie to: a) the Court of Appeal Criminal Division for

trials on indictment (serious offences, where normally a jury trial is required); b) to the High

Court for decisions (e.g., licensing) which do not relate to trials on indictment) by way of case

stated (written submissions) or judicial review. The Crown Court is bound by the House of

Lords and the Court of Appeal (criminal matters only). A judge sitting alone exercising civil

jurisdiction is bound by the High Court, the Court of Appeal, and the House of Lords. Circuit

Judges serve in the County and well as Crown Courts. They are complemented by

Deputy/Assistant Circuit Judges , Assistant Recorders (part-time judges), and Recorders

(part-time judges — same in rank as Circuit Judge when sitting). A Judge of the High Court is

senior to Circuit Judge and decides serious offences (murder, treason).

Magistrates Court

They are the courts of first contact in all criminal cases. They do not have an equivalence in

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Slovakia. They also enforce fines imposed by the Crown Court. They are limited to the award

of a 6 months imprisonment sentence and a maximum fine of L5000. They can remit cases

to the Crown Court for higher sentences for adults. They hear cases for youth crime (under

18 years old, however all homicide cases are remitted to the Crown Court). They are

governed by Magistrates (lay judges) sitting in groups of three assisted by a Clerk (trained

lawyer who advises on law, the magistrates decide on fact). A Criminal Court Judge can sit

alone in a Magistrates court. He/ she is a professional lawyer of some 7 years standing and is

employed by the Court. Magistrates and judges generally must follow the rules of natural

justice of which a prevalent one is: nemo iudex in causa sua — (a judge cannot act in his own

cause).

Such rules of 'natural justice' exist in Slovakia, but tend to be written in the codes, eg., the

Civil Procedure Code. What is not written, does not count.

Due to the lay nature of magistrates, their powers are limited as are the types of cases

magistrates are allowed to hear. Those limited cases that may be heard in the magistrates

courts are split into 3 categories:-

1. Summary trials; and

2. Cases that are triable summarily (by the court) or on indictment (before a jury) (“either

way”).

Other offences are triable only on indictment due to their seriousness, which means by the

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Crown Courts only. Magistrates and County Courts are bound by all higher courts. They do

not bind themselves.

Non-criminal (civil) Courts and Superior Courts with Mixed Jurisdictions

It is to be noted that the appellate courts of the UK perform a similar function as the Slovak

Constitutional and Supreme Courts sitting as appeal courts. However, the main difference is

that the Constitutional Court may also act as a court of first instance, but the Supreme Court

exercises, a purely appellate function. The House of Lords and

and Courts of Appeal are exclusively appellate courts.

House of Lords

The Judicial Committee of the House of Lords is established by custom (unlike Slovakia's

Constitutional Court, which is establish by Act of Parliament) as the highest

appellate court in the United Kingdom. It has a civil and criminal jurisdiction. However, like its

Slovak 'equivalent', it is subsidiary to the European Union Court on matters concerning EU

law. Its decisions are by majority of three judges. The judges sit in committee rooms of the

House of Lords.

The President of the Supreme Court is the Lord Chancellor and as such, he exercises a

similar function in the House of Lords. He is a politician with legal qualifications, however, his

role had been effectively abolished. The House of Lords is generally staffed by Law Lords —

Lords of Appeal in Ordinary (life peers) who are distinguished lawyers of some 10 years call.

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The House of Lords is not bound by its decisions. These are persuasive only. It is bound by

decisions of the European Court on matters concerning EU law. Its decisions bind all lower

courts. Where the House of Lords is being asked to move from its previous decision, the

representing lawyers have to state clearly that this is the case.

15 Judicial Committee of the Privy Council

This court is the highest appellate court for most Commonwealth jurisdictions (which is its

primary function). It is bound by the House of Lords in English cases. It does not bind itself,

but binds Ecclesiastical and Prize Courts (apprehension or detention at sea of a vessel)

where it acts as an appellate court. Its decisions are of persuasive authority upon the House

of Lords. It members are the Lord Chancellor and past Lord Chancellors and the Law Lords,

past and present members of superior courts of the UK and Scotland and some judges of

superior courts of commonwealth jurisdictions. There is an age limit of 75 upon membership

(the Lord Chancellor is excluded from this rule). Judicial Committee members are appointed

by the Queen. This has no equivalence in Slovakia.

Court of Appeal

The Court of Appeal consists of a Civil and Criminal division. The Master of the

Rolls is the head of the Civil Division and the Lord Chief Justice is the head of the

Criminal Division. It is staffed by the heads and deputies of the Divisional Courts

and of the High Court and also Lords of Appeal in Ordinary and ex-officio judges of

15 http://www.privycounciloffice.gov.uk

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the Court of Appeal. Hearings can be before a single judge or a panel of judges.

The Court of Appeal it is bound by its previous decisions and that of the House of

Lords. Where there are there are conflicts of its own precedents, it must follow the

precedent last in time. It cannot follow its decisions if they are contrary to a House of

Lords decision. It may deviate from its previous decisions where there was an error

in law and the liberty of a person (who was unlikely to appeal to the House of Lords)

is at stake.

Decisions of the Court of Appeal Civil Division bind all lower courts having civil

jurisdiction, i.e.,. the High Court and the County Court. The Court of Appeal's Criminal

Division is bound by House of Lords and its own previous decisions (and those of the former

Court of Criminal Appeal and Court for Crown Cases Reserved). A full court (five judges) of

the criminal division may overrule its previous decisions. A normal court (three judges) may

deviate from its previous decisions, but this is more difficult there as opposed to the action of

a full court. The Crown Court and Magistrates’ Court are bound the Court of Appeal Criminal

Divisions, but lower civil courts are not so bound.

High Court

The High Court which is a superior court of first instance hearing both criminal and civil

cases, consists of senior judges. As such it is similar to Slovakia's Regional Courts, but

combines this function with an appellate one for the lower courts and in that sense performs

a role similar to that of Slovakia's Supreme Court.

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In the proceedings of the High Court, a High Court Judge normally sits on his own. The court

acts as an appellate court for some lower courts. As a criminal court, the Crown Court is a

part of it. The Queen's Bench Division's judges, along with circuit judges exercise a criminal

jurisdiction when sitting in the Crown Court. In addition, the Divisional Court (eg., Queen's

Bench Division, where more than one judge hears a case - normally important/ serious

cases) hears appeals on points of law from magistrates' courts and from Crown courts which

have heard appeals from magistrates' courts. All claims for judicial review of administrative

decisions or decisions of inferior tribunals are heard by a Queen's Bench judge or a Divisional

Court. Appeals from the High Court in criminal matters appeal lies only to the House of

Lords.

Sub-divisions of the Queen's Bench Division include the Commercial Court, the Admiralty

Court and the Administrative Court (where claims for judicial review are heard). The High

Court is bound by the Court of Appeal, House of Lords and Divisional Court but not by

another High Court judge sitting alone (his decisions are merely persuasive).

Divisional Courts

The Divisional Court is the High Court sitting with more than one judge (normally

three:-

The three Divisional Courts are:-

Family Division – headed by the President of the Family Division

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Queens Bench Division – headed up by the Lord Chief Justice. This Division includes

specialist courts such as: Admiralty and Commercial Court.

Chancery Division – headed by its President, who is the Vice Chancellor. It includes

specialist courts such as: Patents Court.

In criminal cases (heard in the Queen’s Bench Division), the Divisional Court of the

High Court is bound by its previous decisions (but not by another High Court

Division if it is felt to be wrong in law) and by those of the House of Lords and Court

of Appeal. Appeal lies direct to the House of Lords. In civil cases, they are bound by

the Court of Appeal Civil Division — not Criminal Division. Divisional Court’s

decisions bind High Court judges sitting alone and Magistrates’ Courts, but not

County Courts

The County Courts are roughly equivalent to the Magistrates’ Court on the criminal

law side in that they are generally a court of first instance for most civil issues. Their closest

equivalent would be the Slovak District Courts. However, whilst County Courts can only hear civil

matters (torts and contract, etc.), District Courts may hear criminal matters as well.

County Courts are regulated by the County Courts Act of 1984 (as amended) and are

established in “districts” of England and Wales. Generally, most towns, or cities will

have a County Court as they decide the majority of civil disputes in England and

Wales. County Court matters may be heard by: Circuit Judges; Judges of the Court of

Appeal, Judges of the High Court and Recorders/Deputy Judges and District

Judges/Deputy District Judges. Most cases tend to be heard by District Judges, or

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Deputy District Judges and the parties tend to be represented in court by Solicitors.

The courts have jurisdiction in any contract, or tort matters. However, they cannot

hear libel or slander issues and matters relating to title to: franchises, fairs, tolls, or

markets. Personal injury claims concerning recoverable sums of less than L50,000

must be started in the County Court as well as other claims where the Claimant does

not expect to recover L15,000 or more. In addition, claims that by statute must be

started in the County Court must start there. However, claims may begin in the High Court

despite the monetary limits above where the Claimant feels that is due because of its value,

complexity, or general importance. Chancery business (probate, etc.) may be started in the

County Court where the value of the Estate or Trust is L30,000, or less.

Tribunals

Tribunals are informal courts established under Acts of Parliament as courts of first

instance in specialist areas:-

• Immigration

• Employment

• Land

• Tax

• Social Security

• Customs and Excise.

They can be reviewed by the senior courts and in some cases, claimants have a choice

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whether to use the ordinary courts or to begin a claim before a tribunal. They are not bound

by their previous decisions, but are bound by the House of Lords and the Court of Appeal.

This kind of system does not exist in Slovakia.

ENGLISH JUDGES

Categories of Judges

Senior judges are appointed by the Queen who acts on the advice of the Prime Minister.

They can be generally only be removed by a decision following a sitting of both Houses of

Parliament. Other judges, eg., magistrates, are appointed by the UK Lord Chancellor under

the supervision of the UK's Department of Constitutional Affairs' (DCA) (previously, the Lord

Chancellor's Department) Judicial Appointments Commission. Both solicitors (previously only

barristers could be appointed) and barristers may now be appointed and the appointments

process involves the advertising of all vacancies and a formal assessment process. Prior to

the establishment of the Department, there had been much criticism of the method of

appointment of judges who seemed to belong mainly to the elite upper classes of English

society and appeared to be appointed in an unfair way.

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In June 2003, the UK created a new Department for Constitutional Affairs which effectively

replaced the role of the former Lord Chancellor's Department. Instead of the Lord Chancellor

(a senior government minister and head of the judiciary) being solely responsible for the

appointment of judges, the new independent Judicial Appointments Commission performs

this function with him. The role of the Lord Chancellor is being abolished.

Sitting as a judge, considering applicants for judicial appointments, or sitting as Speaker of

the House of Lords (Chairperson) are activities which are not in the remit of the Secretary of

State (Minister) for Constitutional Affairs and which he will not carry out once the post of Lord

Chancellor has finally disappeared.

16The current head of the Department of Constitutional Affairs, who is a cabinet minister, will

act as Lord Chancellor as well as the Department's head, but will not sit in any judicial

capacity in any part of the UK. However, by law the current Lord Chancellor (who exercises a

similar function to that of Minister of Justice of the Slovak Republic) is still President of the

Supreme Court of Judicature of England and Wales (which consists of the Court of Appeal,

the High Court of Justice and the Crown Court, as defined by the Supreme Court Act 1981).

The Lord Chancellor is also President of the Chancery Division and a Judge of the Court of

Appeal. Again, he is also Chairman of the Appellate Committee of the House of Lords and

also a member of the Judicial Committee of the Privy Council, of which he is usually

President.

Most judges in England and Wales are selected from among practising lawyers. The Lord

16 http://www.dca.gov.uk

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Chancellor's main duties in terms of judicial and tribunal appointments are to advise the

Prime Minister (who in turn advises the Queen) on the appointment of Law Lords, Heads of

Divisions of the High Court and Lord Justices of Appeal; etc., and many tribunal chairmen

and members. His duties also includes appointing or advising on the appointment of part-time

judges and judicial officers and appointing more, or less all lay magistrates in England and

Wales.

The newly-established Commission for Judicial Appointments provides, for the first time, an

independent mechanism for applicants for judicial office who feel that their candidacy has not

been considered fairly. In March 2001, Professor Sir Colin Campbell, Vice-Chancellor of

Nottingham University, was appointed First Commissioner for Judicial Appointments. Seven

Deputy Commissioners were appointed in December 2001 to support Sir Colin in his role.

One of the Deputy Commissioners is also Commissioner for Judicial Appointments for

Northern Ireland. The Commission's role is to conduct an ongoing audit of the procedures for

the appointment of judges and Queen's Counsel (QCs – also known as Silks). It handles

comments or complaints from individuals and organisations about the way the procedures

are applied and recommends improvements to the Lord Chancellor. The First Commissioner

will produce an Annual Report alongside the Lord Chancellor's Annual Report on Judicial

Appointments to be published in October 2002.

In terms of salaries, UK judges are relatively far higher rewarded than their Slovak

counterparts. For example, annually the Lord Chief Justice is paid L200,236, Lords Justices

of Appeal get L166,394, High Court Judges get L147,198 and Circuit Judges receive

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L110,362, whilst District Judges get around L90,000. Justices of the Peace (lay Magistrates)

who deal with 95% of criminal cases get no salary just expenses for the days they attend.

However, as in Slovakia, judicial salaries have now fallen well behind that of the best

barristers and solicitors and that is the subject of some concern.

Magistrates

The sit in Magistrates court and are appointed from members of the general public. However,

judges in the higher courts are appointed from among the ranks of practising barristers and

solicitors.

Criminal Court Judge

There is another class of judge who sits in a Magistrates Court. He/she is a District Judges

(Magistrates' Court) and is legally qualified and sits alone. Unlike the lay Magistrates, who

perform their work voluntarily, he/she is paid a salary. There are around 30,000 Justices of

the Peace and approximately 100 full time paid District Judges.

Lay Magistrates are appointed from persons of good character and personal integrity. They

must live or work in the area and need to have a good knowledge and understanding of the

local community. There is no requirement for any formal educational qualifications.

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This is different to the process in civil law countries, like Slovakia, where a judicial career is a

separate path to that of a lawyer. Basically, a necessary qualification for being an English

judge is experience of practice in the superior courts as a legal practitioner.

As for Slovakia, all English Judges have both civil and criminal jurisdiction and Judges usually

sit in civil, and criminal courts. For example, High Court judges of the Queen's Bench

Division will go 'on circuit' to centres outside London to hear serious criminal, or civil matters.

They may also sit in Divisional Courts to hear appeals from Magistrates and Crown Courts

and also from time to time, in the Court of Appeal.

Law Lords

Judges called Lords of Appeal in Ordinary ("Law Lords") sit in the Judicial Committee of the

House of Lords which is the supreme appellate court in England, Wales and Northern

Ireland. They hear appeals in a Committee Room of the House of Lords. Law Lords usually

hear cases in a bench of 5 judges and also sit in the Judicial Committee of the Privy Council.

They are appointed by the Queen on the advice of the Prime Minister. They are also

Members of the House of Lords sitting as a parliamentary chamber and as such speak in

debates without party affiliation.

Subject only to the European Court of Justice in EU matters, the Law Lords as the final

appeal authorities, say what the the Law of England is. In that regard, they exercise a

function similar to that or the Slovak Constitutional Court.

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High Court Judges

The Heads of Divisions of the High Court are Lords Justices who are the presiding judges of

one of the Divisions of the High Court. The Heads of Division have administrative

responsibility for their division as well as presiding over panels of the Court of Appeal and

Divisional Courts.

There are around 100 High Court Judges appointed for England and Wales. They sit at first

instance. They are usually knighted and sit in three divisions: Chancery, Queen's Bench and

Family. The Queen's Bench Division is the largest division and includes some specialist

courts like: the Administrative Court, the Commercial Court, The Technology and

Construction Court and the Admiralty Court.

Circuit Judges

Circuit Judges deal with the majority of civil and criminal cases, whilst High Court judges deal

with the most difficult and serious ones. They sit mainly in the Crown Court for criminal cases

and in the County Court for civil cases. They tend to specialise in civil or criminal work. Each

court circuit has a supervisory judge for the circuit. In criminal cases, when they sit in the

Crown Court, a judge hears the case with a jury. The judge decides on the law and the jury

decides on the facts of the case.

Other Judicial Officers

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Masters (Procedural Judges), Registrars and District Registrars - these are stand-in, or

deputy judges of the Courts who have the power to deal with only specified matters such as

costs hearings, interlocutory applications and less important trials.

In respect of the enforcement of judicial decisions, High Court Sheriffs and County Court

Bailiffs, perform a similar role to 'Exekutors' and 'Bailiffs' in Slovakia although their training is

not as formalised. In the UK, these law-enforcement officers have far less powers than the

Slovak counterparts and their work is performed in the main, with the authority of specific

orders which have to be applied for in their relevant supervisory court. 17Whilst Sheriffs (now,

High Court Enforcement Officer), were previously self-employed, now like Exekutors in

Slovakia, together with 18UK County Court Bailiffs, they are salaried.

The main purpose of these judicial officers relate to the collection of debt. The primary means

of enforcement is their authority to seize goods and sell them to pay off a debt. However, in

the UK, goods are seldom seized, the threat of their seizure being enough to make debtors

pay.

District Judges (Civil)

District Judges are judges normally chosen from the ranks of solicitors. They hear small value

and routine cases and have powers to deal with interlocutory matters.

Recorders, Deputy Judges, Etc

17 UK Courts Bill 2002 which became effective from 1st April 2004.

18 Some private (self-employed) Bailiffs can be engaged by Magistrates' Courts to enforce civil judgments.

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In these categories, judges are part time appointees who are barristers and solicitors in

private practice. They are used to offset delays in the judicial system which arise from a

shortage of full-time judges.

Tribunals Judges

Statutory tribunals have grown up on an ad-hoc basis and deal with a vast range of disputes

between the citizen and the state as well between each other (for example, employment

disputes). They are normally chaired by professional lawyers, or lay experts in the relevant

field and are appointed on a part-time or full-time basis. They are paid a a salary between

that of a Circuit Judge and a District Judge. However, their quality is reported to be dubious

are most are being reformed.

Lord Chief Justice

The Lord Chief Justice presides over the Queen's Bench Division of the High Court and the

Criminal Division of the Court of Appeal. He is second in rank to the Lord Chancellor and as

such has responsibility for the development of sentencing policy in the criminal area. He

must be consulted on decisions on the release of certain prisoners serving life or other similar

sentences may be considered for release on parole. The Lords Justices of the Queen's

Bench assist him by sometime acting as deputy presiding judges.

Master of the Rolls

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The Master of the Rolls is the head of the Court of Appeal (Civil Division). Solicitors are

admitted to the Rolls of Solicitors (register) by him and he approves their rules of professional

conduct.

President of the Family Division

He/she presides over the Family Division of the High Court and Family Division and certain

hearings in the Court of Appeal. The Family Division hears cases involving children and

young persons.

Vice-Chancellor

The Vice Chancellor presides over certain hearings in the Court of Appeal and is the head of

the Chancery Division of the High Court. The Chancery Division hears serious cases

involving commercial matters.

Lords Justices of Appeal

Lords Justices of Appeal hear matters in the Court of Appeal and in Divisional Courts of the

High Court. They are usually promoted from the High Court Bench. Although called "Lords

Justices", they are not 'Lords/Peers', but knights or dames.

The Court of Appeal has a Criminal Division and a Civil Division. In both divisions, interim

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matters are dealt with by a single Judge or a Registrar. In the Criminal Division, the Court of

Appeal usually hears matters in groups (panels) of three. In the Civil Division, the Court sits

in groups of two or three.

They decide on legal trials/cases. Lower levels in civil courts are dealt with by a

single judge who decides issues of law and fact. In criminal cases in the Crown

Courts, the judge sit with a jury, where the judge decides issues of law, and jury

issues of fact.

Official Referees

Official referees are judges who work to examine complicated documents in cases —

these are separately tried.

Costs Judges/Registrars/Masters

Costs judges, registrars, or masters (procedural judges) examine and adjudicate upon

matters ancillary to trials in the senior courts, e.g., costs assessments, interim relief

orders, etc. In the County Court, District Judges or their Deputies normally provide

this function.

Magistrates

They are first-instance Criminal Court judges. They are “lay” (non-lawyer) judges

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appointed from ordinary United Kingdom citizens. They sit in the Magistrates court

where most/all criminal trails will begin and decide on matters of law and fact with

the aid of the Clerk (who is a qualified lawyer), who will advise the Magistrate on the

state of the law. They have powers of sentencing, but these are limited and deal with

small number of non-criminal matters (e.g., licensing).

The structure for the appointment and activity of English judges is quite radically different

from that obtaining in Slovakia. This is due to the fundamentally different legal structure (i.e.,

the common law system) under which they operate and also matters of historical tradition.

As such the role, appointment and dismissal of judges in the two jurisdictions are quite

different and may only be roughly similarised.

HOW ENGLISH JUDGES APPLY THE COMMON LAW

Judicial Precedent

Judges are bound by the systems of 'stare decisis' and must follow the decisions of a higher

court of the land. As such, where the main facts of a case are the same, the cases must be

decided in the same way. This is called the 'ratio' (Ratio Decidendi) of the case. For example

in a 19case where, where in the course of a driving lesson, the driving instructor’s knee cap

was broken when the driver negligently hit a lamp post. The driver argued that he should not

be judged by the standards of a fully qualified driver. The judge said:-

'…if a driver goes off the road onto the pavement and injures a pedestrian, or

19Nettleship v. Weston [1971] 3 All ER 581

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damages property, he is prima facie liable…It is no excuse for him to say: I was a

learner driver under instruction. I was doing my best and could not help it. The civil

law permits no such excuse. It requires of him the same standard of care as any other

driver. It eliminates the personal equation and is independent of idiosyncrasies of

the particular person whose conduct is in question ..the learner driver may be doing his best but

his incompetent best is not good enough. He must drive in as good manner as a driver of skill,

experience and care who is in sound mind and limb …'.

In that case, therefore, the ratio was established that in cases where negligence of the Defendant

is asserted, the Defendant is judged by the standards of the ordinary, reasonable person skilled in

the art he was applying himself to at the time of the event.

The ratio therefore is the principle of law together with the reasons for the principle. Ratios may be

widened or narrowed by the judges.

In the course of a trial and normally building up the 'ratio' of a case, a for example, a House of

Lords judge may say: “..well, had Mr Smith been insolvent at the time, it clearly would not have

been right for him to act as a director..”. However, in the case under consideration by him, Mr

Smith was not insolvent, so the judges comments are not the ratio. These comments are

categorised 'obiter dicta', which means, things said in passing which are legal principles with

reasons but which are not applied in the case.

These 'obiter' comments, though not binding in a subsequent case in a lower court, where they

relate to the facts of later case in that court, then those obiter remarks will be highly

persuasive upon the deciding High Court judge.

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Judges may also look to the decisions of superior courts of common law jurisdictions (in

particular, the USA, Australia, Canada, New Zealand) for guidance in deciding matters where

there are no precedents available. These decisions are of 'persuasive' authority. The same

rules for applying these judgments would be used.

It is to be noted that the decisions of the superior courts of the UK have a profound and

highly persuasive influence on the courts of common law countries and are regularly cited

and followed in the courts of these countries.

Statutory Interpretation

Judges have to use traditional skills in the interpretation of Acts of Parliament, as

there are no specific Acts which guide judges in this way. For European law, judges

can refer to the European Commission’s explanations for guidance and generally

must interpret the treaties in accordance with the European Court of Justice’s

standpoint in interpreting the treaties. In the interpretation of English law, the three main

traditional rules of statutory construction in the English courts are:-

• Mischief Rule – the court looks to find out the purpose the Act was meant to

fulfill

• Golden Rule – here the words of the Act are interpreted to give Parliament’s

purpose

• Literal Rule – simple words are given their ordinary meaning.

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Interpretation guidelines consist of:

• Ejusdem Generis – categories of things and people are referred to only if they

are so classified in the Act;

• Expressio unius exclusio alterus – here other members of a class are excluded if

a specific member of a class is mentioned in the Act;

• Noscitur a sociis – words in a section or the Act are read in context;

• Hansard – the journal of the proceedings of the House of Commons can aid the

court where the Act is ambiguous, or applying its literal meaning would lead

to absurdity.

Generally, the rules of statutory construction may be used to aid the court to find out

what Parliament had intended. The title, preamble and headings of the Act can be used to

find that out.

The decisions of all courts (apart from the County Court, Magistrate Court and

Tribunals) are recorded in Law Reports generally reviewed by the judge who heard

the case. The main law report publications are: The Incorporated Society of Law

Reporting (ISLR — “Law Reports”); and All England Law Reports (AER — Law Reports ).

The reports are published weekly. The main United Kingdom newspapers — Times,

Guardian, Independent, give the decisions of important cases on a daily basis. The

cases are reported on by the barrister/counsel who was present at the case appearing

for one of the parties. The ISLR/AER is the preferred citation source.

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Where a report is not yet available, the evidence of the barrister/counsel appearing in

the case can be quoted. There are also various computer media, such as LexisNexis,

which provide comprehensive case reporting.

SLOVAK LAW CLASSIFICATIONS

Generally, Slovak laws have different effect and validity depending on the method of

passing and which body passed it. Codes exist for: Civil Substantive, Procedural, Criminal,

Commercial and Labour laws. Court decisions are not binding, no precedents are available

except those of the Supreme Court – but they are only binding de facto. There is still a

tendency to divide the legal system into a private and public part. However, some legal fields

are impossible to put only into one of the parts. Typical private law fields are: Civil and

Commercial law. Typical public law fields are: Criminal and Administrative law. Since

Slovakia's accession to the EU in May 2004, by its Constitution and like all member states, its

national laws are subsidiary to EU law where there is a conflict between them and EU law.

ENGLISH LAW CLASSIFICATIONS

Despite its relatively 'uncoded' nature, English law can be classified into discrete areas of

application as follows:-

Private Law

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This concerns the legal relationships of natural and juristic persons in everyday transactions

and includes:-

• Contract law/Commercial/Business Law — law relating to obligations in

agreements between persons;

• Torts/Obligations — law relating to civil wrongs (nuisance, negligence, etc.)

which are obligations arising not out of agreement, but from duties imposed

by the law breaches of which entitle the affected party to be compensated;

• Trusts — law relating to where one or more persons hold property

(tangible/intangible) for the benefit of others, or similar rights implied by

operation of law — constructive trusts (where a party may be deemed by law

to be holding, or to have held property or shares in property for others); and

• Property/Land Law — law relating to the ownership of fixed property.

Criminal Law

Criminal Law covers laws relating to public offences against the state, which attract

punishment by the state.

Public Law

Public law encompasses the constitution (authority for making law), the validity of

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law and the process of authorizing laws and administering justice. It also covers

“public international law” which is the law governing agreements/treaties between

nation states.

Civil Law

Civil law, in the English legal system, generally refers to non-criminal law and as

such includes contract, torts, trusts, property, etc.

European Union Law

On all matters concerning the European Union (EU), this form of law takes

precedence over domestic law not only for the United Kingdom but also for other

member states. There are many types of law, which come out of the EU, Regulations

being one form, which are direct applicable over Acts of Parliament. Directives

generally need to be implemented into local law to be effective.

Types of Laws

Statute Law

As for Slovakia, statute law includes 20Acts of Parliament and/or rules made under such Acts

(delegated legislation). An Act of Parliament by virtue of the doctrine of

parliamentary sovereignty is the highest form of law in the United Kingdom, subject

20See, for example, Sale of Goods Act 1979, Bills of Exchange Act 1882.

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to the above exception. Parliament cannot bind itself under the doctrine of

parliamentary sovereignty, thus statutes may replace old statutes and/or the

common law. This is the same in Slovakia.

21Delegated legislation refers to laws passed under the authority of an Act of

Parliament. For example, an Act of Parliament may give a government minister, or

some other body, power to make certain rules under it (e.g., immigration rules, civil

procedure rules). Other types of delegated legislation (sometimes referred to as

“subordinate” legislation) are Orders in Council (laws made under the residual power

of the monarch) and Byelaws (rules permitted to be made normally by municipalities

by Act of Parliament, or by other law).

Customary Law and Canon Law

Custom denotes law that has arisen out of custom, not common law precedents or

statute. For example, the House of Lords is the Supreme Court of Appeal in the

United Kingdom, but this is only accepted by custom. The House of Lords is not part

of the Supreme Court of England and Wales. Other customary laws can be seen in

the operation of say merchant/ordinary contract law – “course of dealing”, “implied

terms”. Canon law is the law for the administration of justice among the Clergy.

Legal Treatises

Legal treatises by distinguished scholars or judges such as possess, Coke, Blackstone

and Dicey may be (persuasive) sources of law as indeed, the decisions and deliberations of the

211Normally called: Statutory Instruments (SI)

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superior courts of other Common Law jurisdictions. These, of course, would not bear on the

decisions of a Slovak court which are informed only by the prescriptions of the Codes.

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CHAPTER 4 - EUROPEAN UNION LAW

INTRODUCTION

Both Slovakia and the UK are members of the European Union ('EU') and the nature of the

institution makes it play an important part of the justice system of both Slovakia and the UK.

Therefore, this section briefly sets out in summary fashion the ingredients of its legal system so

as to provide a framework for understanding an important aspect of this Book's setting.

NATURE OF EU LAW

The EU possess general principles of law of all member states' judicial systems and these are

utilised as standards against which its legal rules are analysed by it and ultimately applied. These

principles are, in the main, introduced by the European Court of Justice, their sources of law being

the domestic legal systems of the member states or international law. EU law is supreme over

the laws of the member states. This means that where national and EC law conflict, national law

is disregarded.

SOURCES OF EU LAW

This consists of: -

· Primary Legislation - founding treaties

· Secondary Legislation - law enacted under the EU Treaties Secondary Legislation -

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regulations (Art 239) are directly enforceable; however, directives (Art 249) need to be

implemented via national law, but, individuals can apply for remedies in the national courts

when they have been affected by the non-implementation of a directive); decisions (Art.

249 - binding to whom they are addressed), recommendations (persuasive) and opinions

(persuasive). However, for the purpose of classifying measures, the ECJ will look at the

substance rather than form (eg., in International Fruit Co. NV v Commission (No 1)

(1970) what was called a regulation was a bundle of decisions.

· Acts of Community Institutions - eg. , Les Verts v European Parliament (1986) - a

decision of the EU Bureau of the European Parliament relating to the distribution of funds

prior to elections was held to be a legally binding act.

· Agreements with Third Countries - eg., Lugano Convention (Treaty for the Enforcement

and Recognition of Judgments in non-EU states (principally EFTA states).

· General Law Principles - as recognised by the European Court of Justice (eg., estoppel)

1. Art 220: law includes written law in the Treaty and also principles created by the

Judges.

2. Art 230: a EU Act may be cancelled if it infringes the Treaty or any rule of law relating

to the the application of the Treaty;

3. Article 288 (2) : the non-contractual liability of the EU (eg., in actions outside contract

law) is based upon the general principle common to the laws of the Member States.

· Principles of National Laws of Member States

· Principles of Human Rights in International Treaties - the European Court of Justice (ECJ)

will enforce principles of fundamental human rights which were inspired by Treaties on

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which Member States on which collaborated, or of which they were signatories.

GENERAL PRINCIPLES OF EU LAW

· Fundamental Human Rights - every member state is a signatory to the ECHR Treaty - Art

6. The rights which have been recognised by the ECJ include:-

1. property rights

2. religious rights

3. right to privacy

4. right to client/ lawyer privacy

5. due process of law

6. non-retroactivity of Criminal Law

7. principle of legal review.

Adherence to these principles are a condition for membership of the EU and a member state

can be excluded from membership for persistent and serious breach of human rights (Article

7). Performance in the human rights area is also an important aspect for the granting of

funds for development aid (Article 177). The Charter of Fundamental Rights of the European

Union of 2000, although a declaration and not legally binding, it is an important influence on

the EU Court's decisions and is destined to be included in the EU constitution which is in the

process of formulation now.

· Principle of Equality - the EC Treaty gives specific examples -

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1. discrimination on grounds of race, sex, etc. is prohibited (Art 12)

2. discrimination between employers and producers in agriculture is prohibited

3. discrimination between employees on grounds of sex is prohibited

4. generally discrimination against people in similar situations is not allowed unless it

can be justified.

Non- discrimination is a fundamental principle of EU law. By Article 12 member states may

not discrimination on grounds of nationality (for example) and by Article 141 equal pay for

equal work for men and women is demanded. There are extensive areas within which

discrimination is not allowed which include, sex, racial or ethnic origin, religion or belief,

disability, age or sexual orientation.

· Proportionality - a public authority cannot impose obligations on a citizen except to the

extent that they are strictly necessary for, or proportionate to the aim that is sought.

Proportionality is a derivative of the German legal system. Its application demands the

balancing of means and methods by which objectives are achieved. As such any action of

the EU shall not go beyond what is necessary to achieve the objectives of EU law, in

particular, the Treaties (Article 5). For example, EU anti-discrimination policy should not go

beyond its aims, otherwise it becomes illegal.

· Subsidiarity - this principle sets out the rule that (by Article 5) action, or law made by the

EU should only be effected where the EU is in a better position, than the relevant national

state, to achieve a better result. As such the issues on which EU law, or action would

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follows would need to be (according to the EU's Protocol on Subsidiarity) based on the

matter in question having a transnational character; whether individual actions by

member states will conflict with the requirements of the EU and whether the Council is

satisfied that EU involvement will produce clear benefits by reason of scale or effects.

Proposed laws by the EU are required to pass this test, but this does not appear to be

justiciable before the EU Court of Justice. However, this has not been tested as yet.

· Legal Certainty - at any one time a person should know of his legal position and his rights

may not be taken away by retrospective legislation. As such, any EU law, or action, should

not be beyond the legitimate expectations of those affected. Such expectations are those

that concern acts which are made in accordance with law and which are reasonable.

· Legal Professional Privilege - individuals have a right to confidentiality of written

communications between lawyer and client. The communication must be for the client's

defence and secondly, the lawyer must be in private practice. It cannot be used for

obstructing the course of justice.

· Due Process and Natural Justice - where a person's interests are affected by a decision of

a public body, then he has a right to make his views heard before the decision is heard.

· Equity - general principles relating to the English legal principle of equity. Eg., good faith,

fairness, force majeure.

EUROPEAN UNION INSTITUTIONS

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The following represent some of the main EU institutions.

EU Parliament

The EU Parliament is based in Strasbourg and there around 626 MEPs representing an

approximate proportion of the population of member state (eg., Germany 99, France, Italy, Britain

87, etc.). MEPs follow their political affiliations. The EU's Parliament performs an consultative and

supervisory role by supervising the role of the Commission (which it may dismiss). In its

consultative role in the legislative process it must be consulted for legislation to be passed. A

summary of its functions is as follows:-

· Legislative – it can request the Commission to submit proposals to it on matters where

it thinks the Community should act. It is generally accepted as providing the future

political direction of the Union.

· Co-decision - it can prevent legislation being adopted in certain areas (eg., transport,

development aid, trans EU networks, Employment, Public Health.

· Assent – its assent is required on international agreements, treaty decisions,

accession of new member states.

· Consultation – required for all budgetary issues, all Acts (must be allowed 2 readings);

· Ombudsman – citizens of member states can complain/ petitions MEPs

· Censure - it can remove all Commissioners by a 2/3 majority + absolute majority (only

the ECJ can compel a Commissioner to resign on ground of serious misconduct, or

inefficiency).

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· Liability - it can be sued as it can be a source of justiciable (decisions) acts – Article

230 (eg., Les Verts v EP (1986). In some circumstances it may not be sued - see

Article 38 (ECSC)

· Veto - its opinions have no binding force, but if its participation is required for a

community measure to be valid and its participation is not sought or effected, then

failure to comply gives ground for cancellation of the measure.

· Advice - it can be consulted by other institutions on an optional basis.

European Council

This is a body composed of heads of member states who formulate policy for the Council of

the European Union (Council of Ministers).

Council of the European Union

This is composes of representative ministers of the member states. They propose legislation

for execution by the European Commission and decide it. Their decisions are fully binding

upon the European Union. It is the main decision-making institution of the EU and the general

EU legislative authority (Article 202). Its two divisions are:-

Coreper 1 – this unit gives technical assistance in the law-making process

Coreper 11 – this provides administrative assistance in the law-making process and is

composed of EU Ambassadors.

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European Commission

This body Initiates legislation and acts as a watchdog of EU Treaties and law.

European Court of Justice

This court decides on disputes on the interpretation and application of EU law:-

· between EU Institutions;

· member states; member states and institutions

· and individuals and member states.

Court of First Instance

This court deals with:-

· Disputes between the institutions and their servants

· Actions brought against the EU regarding taxing issues

· Actions brought by natural persons concerning the legality of Acts of the institutions, or

failure to act, for compensation for damages following arbitral clauses (agreements

between EU institutions and others)

· Actions under Euratom (EU Atomic Energy Authority).

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Court of Auditors

This body reviews finances of all EU institutions.

European Investment Bank

This is an autonomous body whose members are EU member states. It is subject to the

jurisdiction of the ECJ. Its function is to help less developed regions and help with

modernizing the EU economy also supporting projects of interest to more than one member

state.

European Bank for Reconstruction and Development – established by 39 countries it exists to

promote private and entrepreneurial initiatives in Central and Eastern Europe.

SOURCES AND APPLICATION OF EU LAWS

Primary Sources of Law

Treaties

The EU treaties modifying and bringing it into existence the primary sources of EU law as well as

the Accession Acts of the individual members States. The EU's conventions (Article 293)

including the Brussels Convention on Jurisdiction and the Enforcement of Judgments on Civil and

Commercial Matters 1968; Rome Conventions on law applicable to Contractual Obligations 1980,

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etc., are also primary sources of EU law.

The acts of EU representatives setting up agreements between the EU and non-member States

(eg., Lugano Convention - being the Treaty for the Enforcement and Recognition of Judgments in

non-EU States) are primary sources of law. However, agreements between a member state and a

non-member state would not be part of EU law.

Secondary Sources of Law

R egulations - are a secondary source of EU law and are directly effective giving rights to

persons as against the State. Their Direct Effect allows the State to be sued before national

courts (Van Gend en Loos v Nederlandse Administratie der Belastinger (1963) - a case

regarding illegal customs duties).

Direct effect exists: -

· Where an EU provision is clear and unambiguous

· Unconditional

· Not dependent on further action being taken by the EU or State

Vertical Direct Effect - gives rights to individuals against the state where the obligation vests

in an organ of the state (state institution, or owned body) and it is breached. Van Gend is

such a case.

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Horizontal Direct Effect - gives individual's rights against private individuals where an EU

obligation is imposed upon them. The private individuals can be sued in the national courts.

Defrenne v Sabena (No. 2) (1976 ) - this case concerned an unfair employment policy

contrary to Art 141.

Directives

Here, the National courts must interpret national legislation in the terms of directives (aims

and purposes). Therefore, non, or badly implemented directives may be questioned in the

national courts. Directives do not have horizontal direct effect (they do not bind private

individuals) - however, where a national court is faced with 2 ways of interpreting national

legislation, one of which accords with a directive and the other does not, it must give effect to

the EU interpretation - this is called indirect effect.

Where a directive is not implemented, a citizen can sue the state ( Francovich and Bonifaci

v Italy (1995). However, such a directive must:-

· confers rights on individuals

· be identifiable by reference to the directive

· have a causal link between the breach and the state's obligation and the damage

suffered by the Claimant.

Decisions, Recommendations and Opinions

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Decisions of the EU, normally via the EU Court, are binding to whom they are addressed,

however, recommendations and opinions do not bind.

`

BREACHES OF EU LAW

Where a state breaches EU Treaty provisions, it can be sued in the national courts by the

individual, provided:-

· the provision was intended to create rights on individuals.

· the breach is serious

· there is a causal link between the obligation and damage suffered.

CASE CITATION NOTES

Decisions are identified by a unique number, the name of the case and a case reporting

reference. The name of the case is underlined, or italicized in written work. (eg., Case 152/84

Marshall v Southampton and SW Hampshire AHA (1986) ECR 723.

Case numbers have 2 parts. The first part is the case reference; the second part is the year

in which the case was registered. Cases with ‘C’ in front say that they were heard in the ECJ,

‘T’ for those heard in the CFI. Cases in the ECJ have the Roman ‘I’ before the page number

at the end and ‘II’ for the CFI (eg., C-262/88 Barber v Guardian Royal Exchange (1990) ECR

I-1889).

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PRELIMINARY RULINGS

Preliminary rulings is a method whereby a national court can request from the

European Court of Justice guidance relating to the interpretation and

validity of EU law and the validity and interpretation of the acts of relative EU Institutions

including the European Central Bank. This method serves to bring uniformity in the

application and interpretation of EU law.

The procedure for preliminary rulings is that the national court exercises its discretion to

make a reference. No set rules exist, but British Courts have held that the issues they should

consider before making the reference are:

· whether EU law is vital for the decision they are to make

· whether the national court is able to settle the EU provision with confidence having regard

to the need for the uniform interpretation of the law.

National courts refer after working out the facts and deciding on the national law aspect of

the case. By Article 234 (3), some courts must refer if there is no judicial remedy against

them in a national court.

Preliminary rulings effectively set a precedent and are also binding. As such if the referred

matter has already been considered/ decided upon by the EU Court, or by provision of the

acte clair (obvious decision where there is no room for doubt), or where EU law is irrelevant,

then there is no need to refer.

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JUDICIAL REVIEW

By Article 230, the European Court of Justice, is able to review the legality of regulations,

directives, and the decisions of the Council, Commission and the European Central Bank. It

is also able to review acts of the European Parliament whereby third parties would have been

affected. Review grounds include:

· lack of competence,

· infringements of the EC Treaty or of any rule relating to its application and misuse of

power.

· infringements of essential procedural requirements (eg., where the Parliament is not

consulted)

· etc.

Member states, the Commission, legal or natural persons have locus standi.

Non-EU institutions are privileged applicants and do not have to show that the matter

concerns them individually. However, others must show direct and individual concern

(includes being a member of a group). In Plaumann & Co. v. Commission the European

Court held that an individual attempting to establish individual concern must show that the

decision affects him directly. Further an natural or legal person may refer where an EU measure

addressed to a third person affects him.

Actions must be brought within the time limit of two months from the date of action. Even after the

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limitation period, the European Court of Justice may challenge the legality of the measures so as

to assess their inapplicability.

By Article 232, member states and the EC Institutions can sue the Commission,

the Council and the EP for not acting where there was a legal obligation to act. This action is also

available to natural or legal persons (and third parties), however, they must show direct and

individual interest. The action is brought after the Institution was called to act and did not within a

period of two months.

ACTIONS AGAINST MEMBER STATES

Under Articles 226 to 228, the Commission is able to bring an action

against a member state for failure to comply with EU law. Also, by Article 227, a member state

can also sue another another member state for non-compliance with EC law. Where the

Commission acts in this way, it would invite the state to respond and then submit its opinion which

if not followed may be enforced in the European Court of Justice.

THE FOUR FREEDOMS GUARANTEED BY THE EU

These comprise: free movement of people ; prohibition of custom duties and charges having

equivalent effect ; prohibition of discriminatory tax provisions and the prohibition of quantitative

restrictions.

Prohibition of Customs Duties

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Article 23 of the EC Treaty bans custom duties and/or any other charge having

the same effect between the member states and obliges the adoption of common

tariffs in relation to third countries.

Prohibition of Discriminatory Taxation

Article 90 bans discriminatory taxation on imports.

Prohibition of Quantitative Restrictions

Articles 28-31 and Directive 70/50 deal with quantitative restrictions and acts having similar effect

on imports and exports.

The Free Movement of People

The main legal provisions for this freedom are contained in Articles 12, 39-42 and

Directives 68/360, 64/221, Regulations 125/170,1251/70 and 612/68. Basically these measures

serve to ensure that nationals of EU states enjoy the same privileges as nationals of the individual

EU states.

DEROGATIONS

Article 30 allows member states to derogate from Articles 28 and 29 which deal with public

morality; public policy and public security; the protection of health and life of humans,

animals and plants; protection of national treasures; protection of industrial or

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commercial property. Other derogations are allowed in respect of some of the Articles (eg, Article

39 which deals with health issues).

Derogation is possible save that the derogative act is proportional, non discriminatory and aims to

satisfy EU objectives.

COMPETITION LAW

EU law prohibits unfair competition and monopolies and as such Article 81 prohibits

agreements, decisions or concerted practices by undertakings whose object or effect is to

prevent, restrict or distort competition such as price fixing or market sharing. Article 82 prevents

'abuse of a dominant position'.

There are exceptions under Section 3, where if an agreement infringes Article 81(1), is could be

exempted if it satisfied the requirements stated in Section 3 which include: improvements in the

production and distribution of goods, technical or economic progress etc.

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SLOVAKIA AND THE EU

Since the failure of the communist regime, countries in the region of Central and

Eastern Europe countries have sought to become members of the European

Communities. The fifth and largest enlargement took place in May 2004 when 10 countries in that

region, including Slovakia, joined the EU.

Slovakia's joining the EU was a result of a long process of negotiations and preparatory measures

when in October 1993, the European Agreement on Association was entered into between

Slovakia and the EU. This agreement was effective from 1995 and became part of Slovak Law as

Act No. 157/1998.

By the 1993 agreement, Slovakia was required to meet various criteria on aspect of: political

stability; rule of law, human rights and economy. Progress was made in those directions and in

June 1995, Slovakia formally applied for EU membership.

By December 2002, Slovakia had closed all the negotiation chapters and completed the pre-

accession negotiations allowing the Accession Agreement to be signed in Athens on 16 April 2003

permitting it, after an affirmative referendum in May 2003, to join the EU on May 2004.

By clause 69 of the Association Agreement, Slovakia was required, as a main pre-condition for

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membership of the EU, to align its existing and future legislative program with that of the EU.

The Slovak Constitution and the EU

By Article 7 sub-article 1 of the Slovak constitution (Act. No. 460/1992, as

amended…): 'the Slovak Republic may enter into a state alliance with another state

or states. The decision on entering into a state alliance with other states or on

secession from this alliance shall be made by a Constitutional Act and a subsequent

referendum..”.

Slovak Culture and the EU

Slovaks, having had a history of control by communist powers, are used to living within

structures that support secrecy and the process of justice which though ostensibly fair, is

based on an ornate cultural and institutionalised system of corruption. The 'up-front' and

people-focus aspect of the EU together with its emphasis on democracy and fair play, have

made Slovaks both hopeful for positive change and also skeptical that the EU will deliver

these these promises.

The process of change to more Western traditions embodied in the spirit and force of the EU

treaties based on the observance of the law and consideration and care for ordinary people

by those in power will be a long journey which may possible never come to fruit. The Slovak

tradition is to make the laws then get around them by illegal means which give the aspect that

the laws are working. For example, judges are freely bribed in Slovakia. In most cases, the

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bribes are 'inconvenience' money, rather than serious attempts to pervert the course of

justice. In that respect, but way of illustration, registering a Slovak s.r.o. (limited company), or

getting one of its licences, may take a week, or so, or months depending on how much is

paid to the responsible judge. Whereas, it would be difficult to bribe a judge to find

innocence when the facts point to someone having commited a serious crime (eg., murder).

The EU as such has an important role to play by delivering a system of continuing education

and supervision/ enforcement of the Treaty provisions so that Slovaks will be aware that EU's

promises and structures are real and that change is inevitable, beneficial and necessary for

the advancement of their country.

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CHAPTER 5 - OVERVIEW OF CIVIL AND COMMERCIAL PROCEDURE

SLOVAKIA

The Civil Procedure Code regulates civil (non-criminal) and commercial procedure in

Slovakia. The Code specifies the procedure to be followed by the parties and the courts. In

the UK the Civil Procedure Regulations (CPR) serve a similar purpose.

The Slovak Civil Procedure Code, for example, entitles he parties to present their case in

their native language before the court which must hear them parties on an equal footing. This

is similar to the English courts and in most aspect, the Slovak procedural code specifies

those obligations which can be found in the English common law system and procedural

statutes/ rules as well.

Parties in civil proceedings may present their case in any form unless the law prescribes

certain forms and proceedings start (as in the UK) on the basis of a petition, or claim. The

form of this is similar to the UK system. However, in the UK, significant reforms of the civil

courts system has made it possible for trials to be held by teleconference and proceedings to

commence by email!22

As for the UK, trials are mostly specified to be held in the locality of the Defendant, whether

an individual, or juristic person. In order to make the proceedings more economical, the court

may order that cases commenced with it that are related in some way to be joined in one

22 www.courtservice.gov.uk

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single proceeding. In the UK, this is left in the main for the parties application.

The Slovak Civil Code from sections 79- 175 prescribes matters relating to merits, course of

proceedings, conditions of proceedings, evidential rules, etc. In terms of costs of

proceedings, these may be awarded by the court, including court fees, but representation

fees are only awarded where an admitted lawyer appears. However, it is possible for either

party to appeal/ petition the court for exemption from payment of costs and the court will

decide on the merits of the application (eg., hardship, etc.).

Slovak Courts decide on the merits of the case by judgment which covers the entire case

heard before them. The judgment is declared publicly and given by the Chairman of the panel

of the judges. The chairman specifies the verdict of the judgment together with the reasons

and explains any appeal provisions.

In the UK, judgments are made public, but no always delivered publicly. Secondly, judges

would only deal with trial issues and interim/ interlocutory matters would not necessarily be

included.

After declaring the judgment, the chairman of the panel usually requires the parties to say

whether they waive an appeal against the declared judgment.

The court is bound by the judgment as soon as it is declared and a written execution of

judgment is usually signed by the chairman of the panel. A copy of it is personally delivered

to the parties, or their legal representatives. A delivered judgment will be considered final and

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conclusive (res judicata) if it is not appealed. As soon as a case has been finally and

conclusively decided and appeal aspects exhausted, or not used, the same case cannot be

heard again upon the facts. This is similar to the UK.

Slovak courts may issue rulings (procedural judgments), in respect of stays and other

interlocutory, or interim matters and the authority of the court in this regard is set out in the

relevant code.

For matters concerning the registration and licencing of business entities ('Commercial

Register proceedings') the relevant court is Register Court which sits in the district of the

individual or legal entity concerned. In case of a foreign person, the proceedings are

conducted by the court in whose district its enterprise or organizational components are

situated. Judges of the court give their decisions by 'rulings'.

In the UK, this role is exercised by Companies House. The Registrar of Companies at

Companies House is responsible for all administrative matters concerning the statutory

formation and management of all UK companies.

Appeals

All courts must have appeal systems, as for the UK. Appeals are normally specified by law to

be applied for within fifteen days after the delivery of the decision to the party. Unlike the

UK's common law system, appeal courts have a free range to re-examine the case, to hear

evidence, etc., either on its own volition, or upon the application of the appellant. As for the

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UK, Appeal courts may confirm decisions, or change them.

Enforcement of Court Decisions

A party may file a petition for a judicial enforcement of the decision and the court will order

the enforcement of the decision usually without examining the other party against whom it

operates. The enforcement rules are similar to those of the UK's system, save that

Exekutors (judicial officers/ Sherrifs) have wide-ranging powers. They may order bank

accounts to be frozen, seize goods, make charging and attachment of earnings orders etc.. in

most cases without having to go back to the court for authority. In the UK system, judicial

officers' powers are regulated by a system of writs giving them layered authority to various

acts in connection with enforcement.

THE UK

Since April 1999, the civil courts (“civil” in this sense means “non-criminal”) in

England and Wales have been subject to new procedural rules by authority of the

Civil Procedure Rules 1998 (CPR) — made under the Civil Procedure Act 1997, with

the overriding objective of enabling the court to deal with cases fairly, justly and

expeditiously. These sentiments are shared by the Slovak Procedural Codes, however,

whilst in the UK, the CPR is more or less strictly enforced at all levels, in Slovakia the

sentiments of the Procedural Codes are mostly obscured by the cultural aspect of application

of the rules based on the relative power and economic strength of the parties with those

having more power and economic strength being 'more equal than others'.

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In the UK, the 'overriding objective' is a general direction for the parties in the proceedings,

especially their legal representatives and it is also a direction to the court.

The overriding objective includes:-

1. Ensuring the parties are on an equal footing. For example, giving more time to prepare a

case for a party with less resources than another;

2. Dealing with cases proportionately to their complexity, importance and the financial

position of the parties. For example, the court should be attuned to effect of delays

caused by administrative matters on the position of the parties, etc.

3. Saving expense. For example, ordering the parties to use a 'single joint expert'.

4. Active case management by the court to enable cases to be heard quickly. This would

include making such directions as may be appropriate to ensure the speedy progress of

trials;

5. Encouraging the parties to co-operate with each other and helping them to settle in whole,

or part. Under CPR 4.1 the court is required to encourage and host the use of alternative

dispute resolutions (ADR) and the rules also permit the court to halt, or suspend (stay)

proceedings to allow the parties to avail themselves of ADR;

6. Using Costs Orders directly against lawyers who break the rules so as to prevent them

from claiming their costs from their client, or the other party

7. Refusing to give extension of time so as to enable cases to be heard expeditiously;

8. The use of “unless” and “striking out” orders

9. Being sensitive to delaying tactics of some “old school” lawyers.

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In civil (non-criminal) proceedings, a Claim is issued by the “Claimant” (previously “Plaintiff”)

in either the High Court, or the County Court as follows:-

High Court – where the case is for judicial review, or a high court specialist list case

(e.g., Patents Court), habeas corpus (application demanding the release of someone

detained by a court), where there is a statutory requirement (e.g., libel

and slander) to start the case in the High Court, or a case where the Claimant

believes it should be started in that court because of its value, complexity and/or

importance.

County Court – where the claim concerns personal injury for an award of less than

L50,000 and other claims where L15,000 is not expected to be recovered, or any claim

which by statute is required to be started in the County Court.

In personal injury cases, Pre-Action Protocols are prescribed, eg., when the claim is issued it

must be accompanied by a medical report. In Slovakia, these protocols do not exist as such.

Court Tracks

Civil cases are allocated to court “Tracks”. There is no such system in Slovakia.

The tracks operate on the following basis:-

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Small Claims Track — for cases where the award sought is up to L5000. Cases are

restricted to a one-day hearing. But for personal injury, the amount sought must be

no more than L1000 — for housing repairs, the claim must also be under L1000.

Written hearings are possible, if the parties agree not to appear in person. Parties

may agree for a hearing exceeding the award limits to be heard in this track, subject

to the court’s approval. However, higher court costs would be applicable.

Fast Track – for cases where the award sought is more than L5000, but less than

L15,000. This track provides for the streamlined progress of higher value cases to

include:-

• standard directions for trial preparation

• standard time limit for start of trial from issue of proceedings (normally 30 weeks)

• maximum of one day (five hours) for the trial (generally trial is required to last no

longer than three weeks).

Multi-Track – for cases where the award sought is higher than L50,000. This track

gives a wide range of case management powers to the court for the speedy disposal

of more complex cases, which include:

• standard directions

• case management conferences and pre-trial reviews

• management of evidence “disclosure” issues

• directions for the use of expert witnesses.

The trial period is usually set for one week.

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CHAPTER 6 - LAW PERSONNEL

SLOVAKIA

The main categories of lawyer are: Advocates/Attorneys (Barristers & Solicitors), Notary

Publics (Notaries and Commissioners of Oaths), Judicial Officer (Sheriff/Bailiff) and Judges.

In the UK, main categories are: Barrister (advocate with rights of audience in all courts);

Solicitor (general legal practitioner and 'officer of the court') and Notary. Barristers may only

act as representative through a Solicitor.

Advocates

The profession is fused and Advocates practice as UK 'barristers and solicitors' They are

regulated by Act of Parliament No. 132/1990 Coll. on Advocacy. Practitioners will have met

the requirements of the Act and will have been admitted to the Slovak Bar Association.

Effectively, Advocates need to obtain a law degree. The basic law degree is the Magister in

Law (similar to UK Master's degree) which takes 5 years to complete. Academic training

involved the memorisation of the codes and Slovak legal history. After around 3 years

training in firm, the law graduate sits for the Bar Exams and then, if successful, is admitted to

the Bar. Thereafter, he/she may apply for a doctor of laws degree (JUDr) at one of the

country's law schools. This would involve around 1 to 2 years of and the presentation of a

dissertation. All Slovak examinations are oral.

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Advocates have rights of audience in all Slovak courts and practice independently under the

provisions of the Act. They perform a similar role to barristers and solicitors in the UK,

however, they do not act as 'Commissioners of Oaths' (a role which all UK Solicitors are

allowed to perform) , this and similar notarial work being in the remit of the Slovak Notar

(Notary).

The Slovak Bar Association is an independent professional organisation with around 2500

Advocates and 750 trainee Advocates. It has an exclusive disciplinary role for the profession

and in that and other aspects, is similar to the UK Law Society and Bar Council.

Commercial Attorneys

They used to practice under authority of the Parliamentary Act No. 129/1991 of Coll. on

Commercial Attorneys and gave legal assistance to individuals and legal entities particularly

in business matters being specialists in the areas of: commerce, company and financial law.

They represented anyone in civil proceedings, but did not have rights of audience in the

criminal courts, or before administrative authorities and any similar bodies.

Their profession was regulated and administrated by the Chamber of Commercial Attorneys

of Slovak Republic which gave licences to practice and supervised their conduct. This year

(2004) the profession ceased to exist by merging with the Slovak Bar Association and former

Commercial Attorneys have joined the profession of Advocate by Act of Parliament.

UK

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Solicitors

In the UK, Solicitors are the first point of contact for Claimants and are officers of the

Supreme Court. All solicitors must be on a register of persons qualified as solicitors. The Law

Society of England and Wales, similar to its Slovak equivalent, governs admission to ensure

that all new solicitors are fit and proper persons and have done the relevant training.

Solicitors are normally the initial contact for individuals, public authorities,

businesses, other professions and foreign clients when looking for legal advice.

They have compulsory professional indemnity insurance, which ensures that if the

solicitor is negligent or dishonest, the public/client will not suffer. An independent

complaints facility is provided by the Law Society of England and Wales.

Their independence, integrity and confidentiality are regulated by the rules of Law

Society and matters concerning their fees. There are solicitors offices in practically

every town in England and Wales providing general and comprehensive legal

services including legal advice, documents preparation, pre-trial negotiations,

representation in court, and notarial work. Many solicitors are now authorized to

offer property selling, financial advice and other complementary legal services.

Unlike their Slovak colleagues, Solicitors are able to perform some notarial services

and to certify oaths as 'Commissioners for Oaths'.

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Solicitors are governed by professional rules set by the Law Society of England and

Wales. Generally, they must always act in their client s' interest (except where it

conflicts with a solicitor's duty to uphold justice as an “Officer of the Supreme

Court”). A solicitor must not act if the interests of a client conflict with the interests of

another client, or with other interests. Client details must be kept confidential. Even a

client’s identity cannot be disclosed without the client’s consent. Clients' money must

be kept in a separate account.

Solicitors may not practice on their own, or supervise a solicitor’s office, until they have

been qualified for three years. They are prevented from joining partnerships with non-lawyers,

or being employed by non-solicitors to provide legal services to the public (except in

permitted limited cases, e.g., in law centres). To qualify as a solicitor takes around seven

years and starts off with the gaining of a law degree, or the Common Professional

Examination followed by the Legal Practice Course and 2 years practical training.

A publicity code allows solicitors to advertise in any way they wish but forbids

misleading publicity. Complaints against Solicitors are dealt with by the Law Society

of England and Wales.

Slovak Advocates are under similar rules, but the main difference here is that in the UK

professional rules of conduct, training regulations, etc. are widely enforced, whereas in

Slovakia, these are the victims of the culture of corruption.

Barristers

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Barristers are legal specialists and court advocates. Unlike solicitors, they have unrestricted

rights of audience in all courts. Solicitors need to be specially qualified to appear as

advocates in the higher courts. Barristers are independent practitioners and are specifically

trained to advise clients on the good points as well as the bad points of their case. Their

specialist knowledge and experience in and out of court greatly aids the outcome of cases.

Their pre-trial advice is normally sought by solicitors so as to prevent the cost and worry of

going to court when this is not merited. Over 70 percent of civil cases are settled out of court

and therefore a barrister’s advice/written opinion could greatly help any pre-trial negotiations.

A small proportion of senior barristers are made Queen 's Counsel (QC) by the Lord

Chancellor as recognition of their outstanding ability. QCs are normally instructed to

act in very serious and/or complicated cases. Senior judges generally become QCs

first. QCs normally appear as part-time judges and have certain privileges. The QC

system is now under review and is likely to be abolished in the near future and

replaced with a reviewable quality certification for both barristers and solicitors.

In Slovakia, there is no similar 'honour', or recognition system for lawyers.

Publicly funded legal aid may cover the services of a barrister and sometimes a QC;

alternatively, solicitors can assist the negotiation for fees. Barristers may sometimes

provide their services on a contingency fee basis and as most barristers have low

overheads, their fees are very competitive. Some barristers work for no fee in

deserving cases where legal aid is not possible.

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Barristers can normally only be approached through a solicitor. Solicitors generally

work with barristers quite a lot and will know of suitable barristers for instruction. If

the barrister is available and there is not a conflict of interest, he/she is duty-bound to

take the case. Some professionals (e.g., accountants, architects) are able to instruct

barristers directly on matters within their specialty. As individual practitioners they work in

groups of offices, known as chambers, which are situated in most cities and towns throughout

England and Wales. To become a UK barrister requires a long and expensive period of

training of 5 years, to obtain the academic qualifications and vocational skills for practice.

Thereafter, success at the bar is limited to a small minority of those admitted as the

profession is extremely competitive. This is about the same in Slovakia, bar upon admission,

most lawyers in Slovakia will enjoy a good living from their profession.

UK State Lawyers and Advocacy Groups

Attorney General

His role is similar to that of the Slovak Minister of Justice as he is a politician who is legally

qualified. He appoints the Director of Public Prosecutions (chief prosecutor for the State) . He

prosecutes for the State and defends/prosecutes the State’s relations with other countries.

He also issues practice guidelines for prosecutions. He may terminate a prosecution. His role

is similar to the Minister of Justice of Slovakia. The Solicitor General is the deputy of the

Attorney General.

Official Solicitor

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The Official Solicitor is the Crown protector in adoption and probate cases and has a

duty by law to act as the defender of people with disabilities.

Law Centres /Citizen Advice Bureaux

Law Centres and Citizen Advice Bureaux are publicly supported legal advice centres

for citizens.

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CHAPTER 7 - ADMINISTRATIVE JUSTICE AND JUDICIAL REVIEW

SLOVAKIA

In Slovakia, there are no separate administrative courts in existence; however, senates

(panel of judges) or single judges of general courts review decisions and procedures of public

bodies. These judicial review provisions are regulated by Section 244 – 250 of the Civil

Procedure Code (Act No.: 99/1963, as amended. What is a public body is specified in the

Code.

In the UK (explained in more detail later) administrative law is also within the remit of the

general courts, being in particular the High Court, which is the main reviewing body for

administrative decisions.

Public bodies have to make decisions in accordance with the rules in the Civil Procedure

Code whereby rights and similar are established, changed, or cancelled in respect of

individuals and legal entities. They may also be challenged for inactivity. The proceedings

are normally heard by the court specified in the Code in whose district the authority has its

seat.

In the UK, public bodies make rules based on their powers as set out in the common law and

general, or specific statutes. There is no similar procedural Code for them.

Judicial Review Process

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A person may ask a court to examine the legality of a decision of a public body upon

asserting that his rights have been infringed (Section 247 Subsection 1). But first, all ordinary

remedies have to be exhausted and the decision of the public body has to be a final one. The

Civil Code lists all the situations, in which courts do not examine certain decisions, such as

decisions of a preliminary or disciplinary nature and also decisions regulating the course of

administrative proceedings. However, these decisions may still be reviewable under Human

Rights and EU law.

Generally, proceeding starts with a lawsuit that has to be filed within two months (in the UK -

3 months) from the final decision of the authority. Time limits are strictly enforced. The

parties to the proceedings are the Claimant and the Defendant and an Advocate, or

Commercial Lawyer is required to represent the Claimant unless this is otherwise provided in

the Civil Procedure Code. The court may:-

1. Remit the case

2. Confirm the decision

2. Dismiss the lawsuit if it feels that the authority has 'no case to answer'

3. Change the decision

The public body is bound by the decision of the court.

Act on Complaints

The Act on Complaints No. 152/1998 specifies procedures for filing, receiving,

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registering, executing and controlling complaints filed by individuals and legal entities against

state organs and organizations established by the state (and such organisations that have

authority to decide upon the rights of others (legal entities are included here).

Complaints are by petition which: -

1. Claims that protection is required for rights, or legally protected interests, because these

rights or interests were infringed the activity, or non-activity of a public body/. public authority;

2. Clams that an public body, or authority is required to intervene to protect a right

guaranteed by law.

In the UK, appeals and review systems are normally built into the Act giving power to the

administrative bodies. Further, there is a system of 'ombudsman' whereby, most public

bodies are amenable to their decisions being reviewed by an independent body, or person,

whose decision they would normally have to observe.

As such, essentially, there is very little difference in the flavour of the systems for

administrative justice in the UK and Slovakia. However, public bodies in Slovakia have great

power and review applications are a rarity, whereas in the UK, they are not. A major

difference between the UK and Slovakia, is that whereas the High Court as a general

superior court (hearing both civil and criminal matters) in a judicial review application, may

review the decision of a government minister, in Slovakia this would be in the remit only of a

special court - the Constitutional Court.

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UK

Scope of English Administrative Law

Judicial review of administrative decisions is only available against public bodies and persons

exercising powers given by public authorities. As in Slovakia, it is not available against private

bodies or persons.

UK administrative law, as for Slovakia, serves to protecting individuals from abuse of state

power; help administrative bodies to achieve their goals and to assist openness and good

administration. The law therefore looks to protect individuals from bad, or unreasonable

decisions from governmental organs and also abuses of their power. A good illustration of

this point may be seen in a 23case where, a government Minister announced that he was

going to increase television licences prior to the event taking effect. This resulted in a great

number of people purchasing their licences before the increase in the fee and obvious losses

in revenue for the TV authority. In response to this, a government Minister demanded that the

people who bought licences to avoid the increase in fee should pay the difference, or he

would use his powers to revoke those licences. Here the Court of Appeal said that the

Minister was wrong to ask for the difference in fee as parliament is the only body with tax

raising powers and it had already given a date at which the increase would take effect. The

court therefore held the Minister to have acted outside his powers.

English administrative law also acts to assist public bodies to achieve their objectives. For

23Congrave v.Home Department [1976 ] QB 629.

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example in a 24case where the the government applied for a compulsory purchase order in

order to build a new road, the other party, appealed against this claiming that he had no idea

about the order thus did not appeal within the time limits set. The courts in this instance

stated that the administrative law deals in certainty and did not allow the appeal as the time

limit was over.

Furthermore, English administrative law assists public bodies to achieve good administration. A

good example of this is in a case where 25 residents of an old people’s home were given five days

notice of its closure. The courts held that the notice given was too short and that the residents’

legitimate expectations were breached. Hence, they ordered the council to give appropriate notice

according to good practices.

All these features are present in the Slovak system, however, there a major differences in

practice due to cultural norms (corruption) and also how judges make their decisions (civilian

v common law styles).

Whereas, what is a public body is set out in the Slovak Code, the UK Common Law provides tests

for this:-

The source of power test

This test is designed to show that the body derives its powers from either statute or prerogative

powers. This test is simple and can be established by researching the body.

24R v.Secretary of State of Environment ex p Ostler [1977 ] QB 122

25R v. Devon CC ex p Baker [1995 ] 1 All ER 73

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Nature of function test

This second test attempts to establish where the body gets its power from as although

not established by statute or prerogative powers, certain bodies may have a public function. This

test examines the body to see what functions it is carries out and if the courts deem them to be

acting and performing public functions as opposed to private functions, the body may subject to

judicial review.

As in Slovakia, certain decisions of the public body may not be reviewable. For example it is only

where a body is performing a public role (as opposed to a private one - eg., engaging in a contract

for supplies, etc.) it is subject to judicial review. Therefore, it is only in situations where the body is

established to be a a public authority that judicial review may be invoked to review its decisions or

acts which are public in nature. For example, in a dispute between the decision of a local authority

to award a liquor licence, this would be a public law matter and as such be reviewable in the

courts.

Locus Standi

According to case law, to bring an action for judicial review, the litigant must have “

“sufficient interest” in terms of his personal rights being infringed. The 26test for locus standi is

prescribed by Act of Parliament, however, the courts have a wide discretion to grant locus standi

to individuals (who could even be in a class - eg., local council licensees).

Grounds of Judicial Review

26Section 3 (3) Supreme Courts Act 1981

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27Lord Diplock set out the grounds for judicial review as follows:-

1) Illegality - basically, the decision is contravenes established law by being improper, or immoral.

2) Irrationality - generally regarded as a decision which defied comprehension and something and

had a flawed logic. It applies to a 28decision (per Lord Diplock) which “..is so outrageous in its

defiance of logic or of accepted moral standards that no sensible person who had applied his

mind to the question to be decided could have arrived at it”.

3) Procedural Impropriety - generally in circumstances where an authority fails to follow the

procedural guidelines or rules.

Rules of Natural Justice

The rules of natural justice apply to all areas of law and the two principles that are of most useful

to administrative lawyers are 1) rules against bias (nemo judex in causa sua ) and 2) rights to a fair

hearing (audi alteram partem ). 29The rule against bias, applies to situations where the decision-

maker through conflicts of interest, usually monetary, can be challenged. It also applies to

situations where the decision maker has a closed mind and when decisions are made before

discussion.

27Council of Civil Servants Unions v. Minister for the Civil Servants [1985 ] AC 374

28See GCHQ Case [1985] AC 374

29See R v. Gough [1993] 2 WLR 883

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The right to a fair hearing enables the challenging of decisions in circumstances where

individuals have not been given a fair hearing or where the hearing was granted but no weight was

given to it. Basically, this right is restricted to instances where a person would have a legitimate

expectation of a hearing.

Remedies

Judicial review remedies consist of these three main orders:-

1) certiorari (pronounced 'shirt- tee-oh-rah-rye')(quashing order)

2) prohibition orders (must not do)

3) mandamus (stop orders)

Certiorari is a quashing order that the courts may make a decision from a

public body void. The power is now contained in Section 31 (5) of the Supreme

Courts Act 1981 under Order 53 rule 9 (4) and gives the courts the ability to not

only void a decision, but to order the public body to reconsider its decision lawfully.

Prohibition orders prevent the unlawful thing from continuing.

Mandamus is an orders from the court, but which is discretionary. This order is powerful and

covers things such as reinstatement of licences, etc., where the courts feel rights have been

breached. It is an order to the authority to do something.

There are also equitable remedies available in the field of administrative law. Two main remedies

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fall under this heading: injunctions and declarations . Injunctions are a stopping remedy in essence

to restrain unlawful acts from taking place or continuing. It is possible to apply for prohibitory

injunctions, which stop things from happening, or alternatively, mandatory injunctions, which give

a positive obligation upon the public body. Generally though, an injunction against the State is not

possible.

In general when applying for an injunction against a public body, the permission of the Attorney

General must be given and subject to the approval, the applicant

joins the Attorney General with his application. However, the Attorney

General may not consent and his decision is final and so if it is refused, then this avenue is

potentially closed subject to human rights and EU law which may have a bearing on the

applicant's issue with the public body. Furthermore, it is possible to bring a 'private law' injunction

in the following circumstances there are:-

• Interference of public rights which also infringe private rights

• No real interference of private rights, but the public interference has created special damages

from the interference,

Declaration

This remedy is a statement by the court, which declares the rights of the parties. As such, once a

declaration is made, the parties know their legal and then usually act accordingly. 30

30 See, for example Price v.Sunderland Corp [1956 ] 1 WLR 1253,

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CHAPTER 8 - SLOVAK AND ENGLISH COMPANY LAW

SLOVAKIA

The majority of Slovak business/commercial law is covered by the Commercial Code

(Act No. 513/1991 as amended). Beside fundamental general provisions, the Act

contains measures for the administration of a Commercial Register, economic

competition, business companies and business contractual relations.

In the UK, relative law is governed by the common law and various Acts of Parliament

relating to contractual relations, sales of goods and companies regulations.

The Code is the main source of business law, but some judgments serve as guidelines in

instances where the Code is ambiguous. The Code regulates various enterprises, types of

companies and contract law. Hand in hand with the Code is the Licences Act which governs

conditions for entrepreneurial activity. Companies are regarded as legal persons and those

wishing to establish a company sign a contract roughly equivalent to Articles of Association.

When a business entity is registered (this could be a sole trader, or company), their fields of

activity are required to be registered and generally the company needs to get a licence for

each field of activity (Licences Act). Some licences require the business owner to sit an

examination before they can be granted (eg., Employment Agencies), or to have special

qualifications (eg., official translator). A company is legally viable from its date of registration

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with the court. In the UK, however, companies are mostly able to do anything and do not

require special licences for most fields of activity.

The managers (directors) of the company may be Slovak citizens, or foreign nationals

entitled to act for the company. Foreign nationals of non-EU, or OECD countries

generally require a long-term stay permit to be resident in Slovakia. But, citizens of EU and

OECD countries do not need to have a long-term stay permit need not have a long-term stay

permit. Where such a permit is required, foreign nationals need to apply for it at the Embassy

or Consulate of the Slovak Republic in the country of their citizenship and need to present

evidence that they have the right to act for the company. This can be a long process, or a

relatively short one, depending on the influence of those wishing to acquire the permits.

Again, it is possible to apply and achieve exceptions to the rules with regard to how the

applications are made where certain officials (eg., the Foreign Police) have discretionary

powers.

Slovak Business Entities

Public Trading Company

The Slovak public trading company (verejná obchodná spoločnosť -“ver. obch. spol.” or

“v.o.s.”) which is similar to a UK Partnership, is obliged to have two members, or partners

who may be natural or non-natural (juristic) entities . The partners liable for the obligations of

the company to the full extent of their own assets. They

do not have to make an initial investment and each partner can bind the

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company unless they agree otherwise - in the UK, this is the same.

Limited Liability Company

The Slovak limited liability company (spoločnosť s ručením obmedzeným - “spol”,

or “s.r.o.”) is similar to the UK limited liability company whereby at least one person is

required to establish it and it requires to have at least one member (shareholder).

Capitalisation is a minimum of 200,000 SKK in money, movable, or immovable

property. The UK limited company however can be capitalised at any amount, the minimum

is normally one UK pound. Whereas a member of a Slovak company cannot have a share of

less than 30,000 SKK, in the UK, there are no such limits. Similarly though,as for the UK

limited company, members are only liable to the obligations of the company to the extent of

their unpaid share capital. The members/shareholders may appoint a manager, or

managers (executive) who are called Konatels. Directors must have a clean criminal record

and must be natural persons. They need to produce criminal records which must be clean for

Slovakia and their country of domicile. This is not so for the UK where a director does not

have to produce a criminal record and also may be a non-natural person.

The “s.r.o.” is generally used (like the UK limited company) for small and medium-sized

enterprises in Slovakia and as such is similar to a UK limited company. However, its director,

or 'Konatel', must be appointed by the court and has certain responsibilities to the court for

its management which are similar to those imposed upon directors of UK limited companies.

However, once appointed, he may only be relieved of his duties by

the court, whereas, a UK director is free to resign his position at any time.

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The s.r.o. although roughly similar to a UK limited liability company, there are important

differences, in terms of the appointment of directors, their legal status and the capitalisation

of the company. The UK and Slovak entities can be said to be more, or less substantially

different.

Limited Partnership Company

The Slovak limited partnership company (komanditná spoločnos ť - “kom. spol.” or

“k.s.”) is similar to the s.r.o., however, at least 1 partner/member must have

unlimited liability (“Complementary” and also, 1 partner must have

capitalised it (“Commanditist”). Complementaries do not have to invest in

the business as they are usually salaried partners. The Commanditists capitalising the

partnership do not need to work in it and are the managers of the company unless this is

agreed otherwise. This is roughly similar to a UK Limited Liability Partnership (this will be

explained in more detail in the corresponding section for the UK which follows).

Joint Stock Company

Slovak joint stock companies (akciová spoločnosť - “akc. spol.” or “a.s.”) may be

established by at least one juristic entity or two natural persons who must be members. It is

required to have assets of at least 1-million SKK. The assets are divided

into shares which can be given in book, or electronic form. The assets of the

company are created by the members investments who own the shares in

return.

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The company is required to have the following institutions:-

• Board of Managers (predstavenstvo ) - The members of the board perform a similar role to

the 'board of directors' of a UK company. The board needs to have at least three members

who can be either Slovak Citizens, or foreign nationals.

• The Supervisory Board - This board is also required to have at least three

members. However a company with 50-plus employees needs to have 1/3 of the Supervisory

Board nominated by the employees.

This entity is similar to a publicly traded company in the UK (PLC), but there are substantial

differences in the required management structure and also capitalisation and trading rules.

As such, the A.S. does not have a close fit with the UK PLC.

UK

English company law is generally regulated by the Companies Act 1985 as amended. Similar

to the Slovak model, an English company is a statutory legal entity whose

existence and conduct is mainly regulated by statute — the Companies Act 1985 as

amended. It is different from a Partnership, which has no separate legal personality. For

example, acts of the Partnership bind all the partners, or in the case of a LLP (limited liability

partner) one, or more of the partners. Furthermore a partnership is taxed under the individual

tax liability of the partners, whereas a company is taxed as an entity. They have similar

powers to that of a Slovak company.

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Companies can be created in any one of three ways:

• Grant of Royal Charter – this is possible under common law rules and

companies so established tend to be those regulating the professions (e.g.,

Royal College or Surgeons), involved in education (e.g., United Kingdom

universities) and some charitable enterprises. This method of creation is not

used for business enterprises in the main. Not possible in Slovakia.

• By Special Act of Parliament — such Statutory Corporations used to be the

format for the establishment of most public utility companies (e.g., BBC,

British Gas, British Telecom, etc.). These days, many of these companies have

been “privatised” and this mode in of creation more, or less is not used now. Not possible in

Slovakia.

• By Registration under the Companies Acts — the majority of trading

enterprises in the United Kingdom are set up by way of submitting to the

regulation of the United Kingdom Companies Acts and other relevant general

Acts of Parliament. As in Slovakia, the majority of companies endure as limited companies

established under the Companies Act. Generally they are able to act through decisions of the

majority of their members (shareholders).

As for the Slovak company, a UK company has a separate legal personality from its

members. It can sue and be sued in its own right and in that respect is not dependent on

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damage suffered by its members to bring a matter before the courts. Where it is affected by a

breach of its rights, etc., it can act independently of its members by decision of the majority of

its members. It has legal permanence, in that it continues to exist irrespective of any change

in its membership.

However, in the UK, there are some exceptions to the rule of “corporate separate

personality ”:-

• Under Section 24 of the Companies Act 1985, where a company is trading

illegally (e.g. if a Public Limited Company trades with fewer than 2 members)

then the members will incur personal liability for its acts.

• The courts by the application of the common law will not allow the company

to be used for a blatantly dishonest purpose, or to evade a legal duty.

• Section 229 of the Act provides for group accounts where companies are

related.

• In times of war, the separate personality of the company can be ignored by the

courts especially where the shareholders are “enemy aliens”.

• The Insolvency Act 1986 (as amended) provides for personal liability of the

members in relation to fraudulent/wrongful trading.

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• Where groups of companies are engaged in fraudulent activities, the courts

will normally ignore their separate personality.

To be able to sell its shares to the public a company must be a PLC. Then, it

would require to achieve permission from the London Stock Exchange to

advertise its securities for sale (under the Financial Services Act 1986 and its

Rules as amended). This is normally achieved by the joining of one of the

approved securities markets (such as the Alternative Investment Market –

AIM).

UK Business Entities in General

As in Slovakia, it is probably more usual for a non-United Kingdom company to

organize its United Kingdom corporate representative entity as a separate limited

company instead of a “branch”. If a “branch” is established, the following will apply:

Under the United Kingdom Companies Act 1985 (as amended) the branch

establishment formalities must be complied with (similar to those for the

incorporation of a new company). These formalities are summarized on the

Companies House website (www.companieshouse.gov.uk ).

As such, the “branch” would need to observe the following rules:-

• It would need to have a permanent place of business in the United Kingdom;

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• Certain information about it and its officers will need to be presented to the

Registrar of Companies (Slovak Companies Registry equivalent) and changes to the above

information will be required to be notified to the Registrar of Companies (Companies House)

within 14 — 28 days;

• Copies of annual accounts including group accounts where applicable must be

submitted to Companies House within 13 months of the end of its accounting

period. It is not sufficient to submit the accounts of the United Kingdom

branch only. The accounts must comply with general requirements of the

Companies Act 1985 although certain exemptions may be given;

• An overseas company is required to display in each place of business in the

United Kingdom its name, the country under the laws of which it is

organized, and state if it is incorporated with limited liability. Invoices,

letterheads and all notices published by the company must contain the same

information.

When PLCs look at a major acquisition or take-over it is necessary to comply with the

requirements of the City Code on Takeovers and Mergers which is designed to

protect the shareholding public. The City Code is only applicable to listed companies

and unlisted Public limited companies (not privately-owned companies).

With regard to employment in companies, nationals of other European Union member states

are not required to obtain work permits and are allowed access to employment on equal

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terms with United Kingdom nationals. Foreign companies setting up operations in the United

Kingdom and United Kingdom companies requiring non European Union personnel usually

have no difficulty in obtaining work permits for senior executives. Employers should obtain

work permits from the Department of Employment (Employment Ministry) for prospective

employees before they enter the United Kingdom.

Some companies may be 'unlimited' whereby the liability of their members is unlimited.

They have all the advantages of incorporation except “limited” liability. They are

exempt from certain disclosure requirements but one or more members of the

company must be personally liable for the debts of the business. This means that they are

not a popular way to trade, most companies being limited.

Limited companies may be either private companies which do not invite the public

to subscribe for shares or public companies which may invite the public to subscribe

and may apply to be listed on the Stock Exchange. Public companies are subject to

stricter legal and reporting requirements. A company may be limited by guarantee of an

agreed amount which is requested when the company cannot pay its debts. This is normally

the form used for charities, professional and educational bodies. However, the majority of

United Kingdom companies tend to be those which are limited (by

shares). Their main characteristics can be summarized as follows:

Capital

A private limited company has no minimum share capital. However it is required to

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have 2 shares. Public companies (PLCs) need to have an authorized share capital of

L50,000 of which at least 25 per cent must be paid up. Capital may be subscribed in a non-

cash form, e.g. machinery, know-how or patents. However, there are tax implications in this

kind of capitalization.

Shareholders

All public companies must have at least two shareholders but there are no

nationality or residence requirements. Private companies need only have one

member. As for Slovakia, the liability of the members (shareholders) are limited to the extent

of their unpaid investment in the company.

Company Name

A public company must include the words Public Limited Company or PLC in the

company name and must use this name on all official documents, stationery and

nameplates.

Board of Directors

Only one director is required for a private company and two for a public company.

There are no nationality or residence requirements and any director may be

chairman. An overseas, or other United Kingdom Company may be a director.

Management

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Managers need not be shareholders or directors but every company must have a

Company Secretary who performs certain legal duties. The secretary may be a director

if there is more than one director. There is no such equivalent in a Slovak company.

Labour

There is no requirement that employees be represented on the board or in

management.

Public Disclosure of Companies’ Trading Activities

Limited liability companies must file annual accounts (some are exempted by

application where they are classified as “small companies”) whereas unlimited

companies do not have to do so.

An independent auditor, who must be qualified under the Companies Act (normally

he/she will need to be a member of one of the Chartered accountancy professional

bodies, e.g., Chartered Institute of Accountants (CA)) must generally be appointed.

Annual accounts together with an annual return of company information must be

filed with the Registrar of Companies. This does not apply in Slovakia.

This information is available to the general public. Smaller limited companies have the option

to file abbreviated accounts and to do away with an audit if their turnover is under L350,000

per annum subject to certain other stipulations.

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Types of Shares

Ordinary (may, or may not have voting rights); preference (carry a fixed rate of

dividend and have preference over ordinary shares for payments of dividend and repayment)

and cumulative preference shares are commonly issued. Redeemable

shares are offered on the basis that the may be bought back by the company. The

company can buy its own shares. Slovak companies do not have this kind of sophistication

and the scheme of 'shares' is more rigid and formalised with 'shareholders' being able only to

hold third of the ownership of the company.

Passing Resolutions

Over 50 per cent of the votes are required to pass an ordinary resolution but some

decisions such as changes in the articles of association require 75 per cent of the

shareholders voting in favour. In Slovakia, the statutory decision-making powers of the

company are largely in the hands of the 'Konatel' (director). Where owners must decide, their

weighting is as prescribed in the formation documents, or by the relevant Code.

Distributions of Company Income

The amount over accumulated actual profits minus accumulated actual losses over

an accounting period is available for distribution. In a public limited company net

assets before and after a distribution must be higher than the total of share capital

and undistributable reserves.

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Company Incorporation and Cost

The same procedural rules apply to foreign and United Kingdom investors wishing

to form a United Kingdom company. Unlike for Slovakia, any investor, wherever located, can

establish a United Kingdom company, or buy it, or buy securities and/or land without any

special licence or state authority. There are no exchange control regulations and there are no

restrictions on overseas investors. But rules for the control of monopolies and mergers will

apply to overseas investors as well as United Kingdom investors.

A company with standard memorandum and articles of association can be purchased

“off the shelf” without delay. A company with memorandum and articles of

association specifically drawn may take longer. A ready-made company will cost

about L150 and a company specifically drawn up will cost several hundred pounds.

The annual cost of filing accounts and annual return is L15. On the other hand, a Slovak

limited company will cost between SKK60, 000 and SKK100,000 to be formed and delivered

to specification. The 'off the shelf' concept does not really exist in Slovakia.

Registration of Companies

A limited company is registered/incorporated when registration documents are

delivered to the Registrar of Companies (Companies House)and approved for

registration. Upon registration of these documents, the Registrar issues a Certificate of

Incorporation. In Slovakia, the Commercial Court for each district, provides a similar function.

Whereas a UK limited company may be established in a matter of days, or sometimes

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minutes, in Slovakia forming/ establishing an s.r.o. is a tiresome and arduous exercise

involving much form-filling, administrative applications and decisions,etc. and as such would

take a matter of weeks to months, to be established.

A limited company can commence trading as soon as the Certificate of Registration is

issued, a PLC has to obtain a Certificate from the Registrar which confirms that it is

allowed to commence trading (as its share capital requirements have been met —

Section 117 of the Companies Act).

Under Section 10 of the Companies Act, the following documents are required:-

• Memorandum of Association — (jointly with the Articles of Association below,

designated ' 'M&A's ) — schedule of the company's relationship with the

outside world.

• Articles of Association — schedule of regulation of the internal affairs of the

company — contract between the company and itself and the members and

between the members and each other

• A statement of the first directors and secretary of the compan y, their consent in

writing to be so and the registered address of the company

• A declaration that the statutory requirements of the Companies Act have been

followed.

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31 SPECIAL TYPES OF LIMITED COMPANIES

A United Kingdom company when incorporated may enters into an agreement with the

offshore company whereby the United Kingdom company agrees that it will trade on

behalf of the offshore company as its agent. All contracts of purchase and sale, all the

invoicing and all the general correspondence will be made in the name of the United

Kingdom company. The agreement should state that all monies received are received

as nominee or trustee for the principal save insofar as there will be an agreed fee

which will be retained by the United Kingdom company. That fee may either be

expressed as a flat fee for all the trading done on an annual basis or, more usually,

expressed as a percentage of the gross revenues received, usually 5 per cent or more.

The practice of the United Kingdom revenue is to accept, subject to certain

conditions, that all non-United Kingdom source monies which are passed over to the

offshore company are received as agent and are not therefore subject to tax in the

United Kingdom. On the basis that 5 per cent of profit is retained the effective rate of

United Kingdom taxation on the gross receipts is 1.2 per cent (5 per cent of the

normal 24 per cent rate).

In order to protect the trading profits from United Kingdom taxation it is essential

that no trading activity must occur within the United Kingdom. What constitutes

31www.inlandrevenue.gov.uk

www.companieshouse.gov.uk

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United Kingdom trading activity would be construed by reference to the normal

criteria, such as the place where the contracts of sale are performed and the location

of the acceptance of an offer made ex-United Kingdom.

The offshore company must be non-resident in the United Kingdom for tax purposes itself.

That is to say, is must be managed and controlled outside the United Kingdom.

Another structure for a UK company is where a resident company develops a co-operative, or

collaborative trading arrangement with an offshore company. The United Kingdom company

is stipulated as the supporting partner carrying out the paperwork with the offshore company

being the principal in the trading activities. The co-operative agreement would specify that the

United Kingdom company receives 5 per cent-10 per cent of partnership profits on which it is

taxable at normal United Kingdom rates, but the majority of those profits that accrue to the

offshore company would not be taxable.

The existence of the partnership agreement can be secret and would not have to be

disclosed by the United Kingdom company. It is possible for the Inland Revenue to

give an advance ruling on the acceptability of the scheme.

These kind of structures do not exist in Slovakia. However the following rules for formation of

companies (bar the aspect of 'red tape') are roughly equivalent to those obtaining in the

Slovak Republic.

Constitution of the Company

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The Memorandum of Association (M&As) comprise the constitution of the company. This is

similar to a Slovak company. It specifies the scope of the company's activities with reference

to the outside world.

Articles of Association

The Articles regulate the allotment and transfer of shares, rights attaching to various shares,

the rules relating to meetings and also the rights of the directors. Companies can use Table A

specified in the Companies Act as model articles. If Articles are not presented, then Table A

applies by default. 32Articles may be changed by the passing of a special resolution of the

members as long as it is done 'bona fide' in the interests of the company as a whole.

Capitalisation of Companies

A company may be capitalised by loan, or share capital. Share capital is the interest in the

company of a member represented by a sum of money for the purpose of liability and benefit

as specified by the mutual promises of the members. In Slovakia, the UK system of 'shares'

does not exist as such as aforementioned.

Types of Shares

• Ordinary — general shares

• Preference — these have priority over ordinary shares for dividend and repayment

32Greenalgh v. Arderne Cinemas Ltd 1951

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and carry a fixed rate of dividend.

• Redeemable shares — these are issued on the basis that they may be brought

back later from the company. Companies can now buy their own shares.

Loan capital, as in Slovakia, may be achieved in various ways:-

• debenture — this refers to a document which acknowledges that a debt is

owned by the company. It is not a share. It usually provides for security for

the amount borrowed by way of a “charge” clause:

• fixed charge – the debt is secured upon a specific aspect of the company’s

property. The company cannot dispose of it without permission of the

debenture holder who can sell it, as well, if the company fails to honour the

debt.

• floating charge – here the debt attaches to a specific aspect of the company’s

property when it becomes due, or is called. Therefore, the company may

dispose of its property without the need to obtain permission. All charges have to be

registered with Companies House within 21 days of their creation. It they are not registered

they are ineffective against other creditors, a liquidator, but are still valid against the

company. Companies must keep a register of charges.

Charges have date of creation priority and a fixed charge takes precedence over a

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floating charge.

Directors

The board of directors is the executive agent of the company (this role is performed by the

Slovak 'Konatel'. However, individual directors, or those with apparent authority may bind the

company. The first directors are usually named in the Memorandum, or Articles of the

company when it is formed and others are appointed by the procedure stated in the Articles.

An ordinary resolution of the company (Section 303 of the Companies Act) is

required for the removal of a director. The company requires to give the members 28

days notice of such an intention. However, The Companies Act provide for the

removal of a director for reason of: bankruptcy, mental illness, or irregular or

extended absence from board meetings.

Persons may also be disqualified from being directors for up to 15 years under the

Company Directors Disqualification Act 1986 for: breaches of companies law;

fraudulent trading and being generally unfit. Disqualification in Slovakia would normally take

the form of an unclean criminal record.

Article 7 of Table A of the Companies Act allows for the directors of the company as

a board to have all the powers of a company. However, this power may be delegated

to one, or more directors by:

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• Express Authority – here a director is given specific authority to bind the

company in a certain way;

• Implied Authority – here a person’s appointment as “Managing Director”, or

“Chief Executive” will give that person implied authority to bind the

company in the same way the board can;

• Apparent Authority – in this instance a director is held out by the board by

having the authority to bind it. If a person acts on that belief, the board is

estopped from denying its truth.

Duties of Directors

Directors must act in the interests of the company at all times whether this is actual,

or perceived. They cannot use their position to make a personal gain and as such

they must always prevent related conflicts of their interest and their duty to the

company. The law is strict in that regard. As for Slovakia, the 'Konatel' has similar

responsibilities which are set out in the Commercial Code.

They have a duty of care and skill as would be expected reasonably of a person of

their skill and experience. However, they may leave the day to day running of the

company in the hands of managers and are not required to give continuous

attendance.

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By Section 214 of the Insolvency Act 1986, where a company is being cancelled

(wound up), and is appears that the director/s knew that the company would be

unable to pay its debts arising shortly before the cancellation, or in a similar

circumstance, then the directors may be personally liable for the company’s debts so

incurred as the court thinks fit.

Company Secretary

The company secretary is an officer of the company required to be appointed under

Section 744 of the Companies Act. He/she is responsible for the statutory compliance

of the company. He/she may not normally bind the company, however, in practice

the company secretary is regarded as having such powers within the scope of his/her

duties as statutory compliance officer. Company secretaries do not have to be

professionally. However, due to the increasing complexity of statutory regulation in

practice, they are either accountants, chartered company secretaries, barristers, or

solicitors. Public limited companies must have professionally qualified (or similar)

secretaries (Section 286 (2) Companies Act). This role is performed by the 'Konatel' in

Slovakia.

Company Meetings

Three types of meetings may be held in companies:

• Annual General Meeting – each company must hold one each calendar year (up

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to a maximum of 15 months). Private limited companies may by unanimous

vote of the members, do away with this requirement.

• Extraordinary General Meeting – that is any meeting other than an AGM. They

may be called by members holding 10 per cent or more of voting shares, or by

the directors.

• Class Meeting – where a holder of a particular class of share may call for such a

meeting.

As for Slovakia, similar meetings are required to be held as specified in the Code.

Resolutions/Decisions From Meetings

• Ordinary resolution – here the votes of those attending which form a majority

authorise the decision. For AGMs – 21 days notice is required, for EGMs – 14;

for the removal of a director – 28 days.

• Extraordinary resolutions – requires a majority of 3 of those voting. 14 days

notice is required for other than an AGM where 21 days is required.

• Special resolution – 3 majority of those voting carry the decision and 21 days

notice is required. Private limited companies can do away with certain procedures for AGMs

(e.g., presentation of accounts) and also holding the AGM – this requires a

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unanimous approval of the members.

Protection of Shareholders

The general rule is that the majority of the shareholders decide on the actions of the

company. However, there is built in protection for shareholders according to the law:

• Where the majority act to perpetrate a fraud on the minority, the minority can

have legal redress;

• A court can wind up a company for just and equitable reasons;

• Any member may ask the court to intervene to provide justice where they feel

that the affairs of the company are being carried out in a way that damages the

interests of some of the members;

• In addition, the government may appoint inspectors to investigate the

company.

Similar protection for owners exist in Slovakia

Winding Up of Companies and Cancellation of Companies

A company be liquidated compulsorily where the court orders so normally on the

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basis of an insolvency application by a creditor. It may also be wound up voluntarily

by an application of the members to the court. It may also be cancelled (‘struck off”),

by an application by the directors to the Registrar of Companies stating that it is no

longer required at a cost of around UKP10.00. In Slovakia, a company may only be

cancelled by an order of a court. This is a long-winded process which is difficult to achieve

and would cost significantly more in any circumstances (around SKK70,000).

It may also be wound up voluntarily by the application of all of the creditors.

A company may also be subject to an Administration Order. Here upon an

application of the members, the court appoints an administrator who tries to save the

company. Once the administrator is appointed, then the company is protected by the

court from most legal proceedings.

The winding up of a Slovak company by the actions of its creditors is an arduous process and

one which is potentially fruitless as in practically all cases, the assets of the company would

have disappeared.

Insider Dealing

Under Pt. v. of the Criminal Justice Act 1993, Section 52 – an individual who has

information about a company as an insider and uses it for his own benefit or that of

others in relation to securities commits an offence. Maximum penalties are: unlimited

fine and/or 7 years in prison. There are no such rules affecting Slovak companies.

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UNINCORPORATED BUSINESS ENTITIES

Partnerships

A partnership is a business relationship between two or more persons or

corporations carrying on a common business for profit. Their activities are governed by 33Act

of Parliament and also the common law. Partners are normally governed by a partnership

agreement between them. Key aspects of the UK partnership are:-

• Individual partners normally take on unlimited liability for debts and obligations achieved in

the name of the partnership;

• Accounts do not have to be filed with the Registrar of Companies;

• There is no audit requirement. Partners are personally liable, both jointly and

severally for the liabilities of the partnership;

• A limited liability company may be a partner with other companies or

individuals.

• 34“Limited” partnerships are permitted where are least one partner retains

unlimited liability but others may limit their liability to the amount of their

contributed to the partnership. Limited partners cannot participate in the

management of the partnership.

• With certain exceptions the number of persons or corporations in a partnership is restricted

33 The Partnership Act 1890 applies where there is no partnership agreement, otherwise, the common law prevails.

34Limited Partnerships Act 1907 regulates 'limited partnerships'.

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to 20.

Limited Liability Partnership

In 2000, a new35 UK legal entity, 'legal liability partnership ('LLC'), was created. LLCs are are

governed by the Act. They exists as legal entities and bodies corporate. Like a limited

company, an LLC can do everything that a limited company, or individual in business can do.

It can make contracts, sue or be sued, hold property or become insolvent. The Partnership

Acts of 1907 and 1890 do not apply to a limited liability partnership, however, the

arrangements between the partners are analogous to a traditional partnership arrangement.

Generally, the main difference between the LLC and it is the entity that is liable for the

activities of the partners, not the partners individually. The LLC, like a limited company, must

be registered with Companies House and must have at least 2 subscribers and needs to

attend to similar formalities (eg., registered address, as for a limited company).

The amount of a partner's liability on the winding up of the company is the amount indorsed

on the LLC partnership agreement. However, it is generally the amount of money the partner

has put into the LLC, plus the amount (net) he has taken out for the last five years (less of

course, the amount of money he is owed by it).

The Slovak V.O.S is similar in structure and formation to an LLC.

Sole Traders

35Partnership Act 2000

152

A sole trader is an individual carrying out a business or profession for himself and is

subject to registration requirements common to all forms of business. The accounts of

a sole trader do not have to be audited or disclosed to the public. Whereas the process for

becoming a sole trader in the UK, is relatively simple and does not require specific 'licences',

in Slovakia, the sole trader is a formal business entity as as such must be registered in the

Commercial Court and obtain the requisite trading licences.

EUROPEAN BUSINESS ENTITIES

36There are now moves being made within the EU to harmonise the structure of companies

and certain EU business entities have emerged: The 37European Company

and the European Cooperative Society, which can operate as a legal co-operative in all

member states under EU law. To establish either type of entity, there would need to be first

established local entities in the Member State and these entities are more 'merger' type

utilities, rather than traditional single business entities.

36Ernst & Young / Weinhold Legal: Doing Business in the Slovak Republic. Bratislava, Slovakia: 2004. www.ey.com./sk, www.eylaw.com/sk.37Effective from 8th October 2004, EU Council Regulation 2157/2001/EC give Member States an option to form a European Company (SE) which

will be recognised in all EU States as a joint stock company.

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CHAPTER 9 - EMPLOYMENT LAW

UK

Employment law in the UK is an extremely wide and fast-moving area, as in Slovakia. As

such it is well beyond the scope of this book to provide an extensive description and analysis

of its structure. However, so as to provide a reference point for comparative purposes, it is

proposed to summarize the some of its more important aspects from an 'employer'

perspective.

It is to be noted that there are quite striking similarities between the employment regulations

of the UK and those of Slovakia. Whereas the rules are enforced differently in both

jurisdictions, their intention and application are mainly similar although there are some

important differences. One important difference is the requirement of employees to join the

company's management team when their numbers reach a certain size. This will be

explained in more detail in the corresponding Slovak section following.

Main Characteristics of UK Employment Regulations

38Employment Contracts : employers must give employees a written statement of certain

important employment particulars (e.g. salary, notice) within two months of commencement

of their employment.

38Employment Rights Act 1996 as amended.

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Parental Leave: Employees with 12 months employment can take up to 13 weeks' leave per

child, on an unpaid basis, up to the child’s fifth birthday. Employers can agree arrangements

that are more generous.

39Minimum Wage: employees aged 22 and over must get a minimum wage of L4.50 an hour,

whilst employees aged 18-21 must get L3.80 per hour. Both rates are reviewed annually

according to law.

40Working Time: there is a limit on working time of an average of 48 hours a week (over a

17-week period), but employees can opt to work longer hours.

41Holiday Entitlement: here employees need to have 20 days paid holiday each year (which is

normally exclusive of public bank holidays). Employers can, of course, agree to give more

(but not less).

Paternity Rights: male employees with more than 6 months employment are entitled to take

up to 2 weeks paternity leave. They will be entitled to all benefits except pay, which is

replaced a statutory paternity pay of L102.80 per week.

42 Sick Pay: sickness pay is now regulated by statute as L66.15 per week up to 28 weeks and

39National Minimum Wage Act 1998

40Working Time Regulations 1998

41Working Time Regulations 1998

42Social Security Contributions and Benefits Act 1992

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this rate is reviewed yearly.

Maternity Rights: female workers get 26 weeks maternity leave which is paid (like sick leave).

In addition, employees with 26 weeks’ employment or more get an extra 26 weeks unpaid

leave.

Time Off To Care for Dependants: workers may take a reasonable amount of unpaid time off

to deal with family emergencies.

Termination of Employment: there are two main remedies against the employer when an

employee's employment is terminated unlawfully: wrongful dismissal and unfair dismissal.

Wrongful Dismissal

Where an employer terminates an employee's contract in breach of contract, the employee

can claim damages for wrongful dismissal. Damages will be normally the amount that would

be required to put the employee in had the employment not been terminated unfairly.

Damages would cover: salary and benefits for the notice period (or until the expiry of the term

where the contract is 'fixed-term'. In respect of notice to be given for termination, the

minimum by law (statute) is one week for each complete year of service up to a maximum of

12 weeks.

If the employer breaches the conditions of the employment contract, the employee may claim

damages for breach of contract in the Civil Courts, or for up to L25,000 in the Employment

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Tribunal.

Redundancy

An employee with two or more years' employment who is made redundant must get a

redundancy payment from his employer. The amount of the statutory redundancy payment is

calculated by looking at the employee's age, length of employment and pay. The maximum

payable under statute is L8,100. Where 20, or more employees within a 90 day period are

to be made redundant, the employer must consult with/ inform the relevant trade unions on

the employees.

Unfair dismissal

Any employee with one year's, or more continuous employment may claim to be unfairly

dismissed. However, others with a lesser employment term may claim 'unfair dismissal' in a

limited number of instances - eg., dismissal for pregnancy or for membership of a trade

union.

43The claim must be made to the Employment Tribunal and not the Civil Courts. To frustrate,

or avoid the claim, the employer needs to show that the employee was dismissed fairly and

that the employer acted reasonably and fairly.

If for example, the employee was dismissed for incapability, the Employment Tribunal will

43Employment Rights Act 1996

157

look at whether the company had :-

· Reviewed his performance with him

· Advised him of his shortfalls and the risks of losing his job if he did not improve

· Provided him with training.

A claim for unfair dismissal must be brought no later than three months from the termination.

If the claim is successful, the employee will normally get up to UKP55,000 as an award. This

figure is reviewed annually.

Discrimination

Discrimination by employers on grounds of sex, race, disability, sexual orientation and

religion or belief is prohibited and those employees whose rights have been infringed may

bring a claim either during their employment or on its termination. Legislation prohibiting

discrimination on grounds is planned to be introduced by December 2006 in accordance with

the November 2000 EU Equal Treatment Directive.

Transfers of Undertakings

The Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE"),

implements the EU Acquired Rights Directive and safeguard employees’ rights where there is

a transfer of a business or part of a business. TUPE ensures that when the ownership of a

'going concern' business is transferred, the employers employment rights and obligations are

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automatically transferred to the new owner of the business.

TUPE also applies in outsourcing arrangements.

Restrictive Covenants:

These are governed by the common law and generally, in employment, an employee must

apply duties of good faith and confidentiality. By these he is obliged not to compete with his

employer and cannot use or disclose the confidential information of his employer for his own

benefit. After cessation of his employment (unless he has agreed otherwise with his

employer) only his employer's trade secrets are protected. Other than that, he can take full

advantage of his own professional skill and knowledge gained, even he got those at the

expense of his employer.

Employers, however, may protect their goodwill and other confidential information in that

regard by imposing a restrictive covenant in the employee's contract of employment

restricting the employee's ability to use, or reveal confidential information and effectively

imposing non-dealing/solicitation limitations with regard to the ex-employee's customers and

staff. Such covenants must be no more extensive than is required to reasonably protect the

employer's business interests. If the covenant is too extensive, it will not be enforceable. In

Slovakia, by far and large these kind of restrictions would not apply.

44 SLOVAKIA

44 Ministry of Labour, Social Affairs and Family of the Slovak Republic: http://www.employment.gov.sk/en/employment/labour%20code%

20311-2001%20-full%20wording_as%20amend%20210-2003.html

· Ministry of Labour, Social Affairs and Family of the Slovak Republic at: http://www.employment.gov.sk/en/

159

Introduction

As for UK law, Slovak employment law is a large and dynamic legal field and for the purpose

of this book, this section will provide a summary, comparative analysis and presentation of its

key concepts.

The Slovak Labour Code regulates employment law in Slovakia. Its most recent 45amendment

has served to bring it much in line with Western nations. The following is a comparative

summary of its main provisions and of employment law generally obtaining in Slovakia.

On 1 July 2003, the Amendment Act passed by the Slovak Parliament for the purpose of

amending the Labour Code became effective. The Amendment Act created a more flexible

regulatory platform for employers, employees and trade unions. In that respect its main

effects concern deregulation of working and employment conditions by the provision of a

basic framework for employment relations between employers and employees and leaving

the more detailed definition of the working and employment conditions to be worked out

between employer and employee. Another important purpose was to simplify the

· Munková, Mariana. European Industrial Relations Observatory On-line, Bratislava Centre for Work and Family Studies: “Fundamental

Changes Made to Labour Code”. Available from: http://www.eiro.eurofound.eu.int/2003/12/feature/sk0312103f.html

· Petrášová, Zuzana . Financial Law News Čechová Rakovský Law Firm: “Amendment to Labour Code”, June 2003. Available from:

http://www.fifoost.org/slowakei/recht/sfln/buch2002/node41.php or www.cechrak.sk

· Ústredie práce, sociálnych vecí a rodiny (Centre for Labour, Social Affairs and the Family)

· Štatistický úrad Slovenskej republiky (Statistical Office of the Slov

45Amendment Act 2003

160

implementation of the Labour Code by eliminating the administrative intervention of several

state institutions, hitherto charged with making decisions in employment relations

The majority of the new provisions introduced by the Amendment Act have received a warm

reception by employers. In that respect, concerning the simplification of entering and

terminating employment relationships and overtime extensions, the majority of employers

feel that their enterprise's requirements have been met by the Amendment Act. As for foreign

investors, the Amendment Act's effective relaxation of the hitherto strict rules for the hiring

and dismissal of employees appears to have been well-received.

The amendments relating to new provisions for fixed-term employment and employment with

reduced working time have been considered good improvements by employers. Especially

welcome have been the provisions for increased overtime and for immediate dismissal of

employees for any substantial breach of the conditions of employment.

Key Aspects of the Amendment Act and Slovak Employment Law

Employment Relationships

A fixed-term employment contract may be now agreed, prolonged or renewed for the

maximum of 3 years. The renewed fixed-term employment is employment relationship

established prior to the expiration of 6 months from the termination of the preceding fixed

term employment between the same parties. The fixed-term employment contract may be

prolonged or renewed over 3 years under the following circumstances:-

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1. substitution of employees,

2. performance of work requiring substantial increase of the number of employees for a

transitory period not exceeding eight months in a calendar year,

3. fulfilment of a task specified by the outcome,

4. reasons agreed upon in the collective bargaining agreement

5. absence of the above reasons for over three years with certain categories of employees,

e.g. executive employees within direct controlling powers of the statutory body, inventive

employee in the area of science, research and development, employees of an employer

employing not more than 20 employees, etc .

The range of circumstances under which fixed-term employment can be prolonged, or

renewed have been significantly broadened by the Amendment Act. In that respect, the

increase in provisions for prolonging or renewing fixed-term employment without giving a

reason are considered to be positive since their absence in the past have caused serious

problems in employment relationships.

The Amendment Act provisions now allow employers to establish several separate

employment relationships with one employee. However, each of the employment

relationships must be related to work of a different kind and each one of these relationships

are subject to separate review 2 .

Termination of Employment Relationships

162

The Amendment Act introduces a new provision for dealing with notice of termination of

employees with reduced working time (20 hours per week, or less). Here an employee, or an

employer in such an employment relationship may terminate the arrangement without giving

a reason, or can do so for any reason 1&2.

The Amendment Act now allows for a fixed-term employment relationship to be terminated

with immediate effect by the employers without stating a reason. However, where that

provision is exercised, the employee will be entitled to compensation of wages equivalent to

his/ her average monthly earnings until the employment relationship should have gone to

term. However, employees on maternity leave or parental leave, and single employees caring

for children below three years of age, may not be given notice of termination of employment

at all.

The provisions of the Labour Code regarding notice of termination have been generally

affected by the Amendment Act. In particular, for termination of employment, the length of

the notice of termination notice for employers and employees has been unified by the

Amendment. In that respect, both employer and employee must give a minimum of two

months notice of termination to the other side. There is an exception for notice of termination

given to the employee for employment relationships where the employee has been employed

by the same employer for a minimum of 5 years. In such a case, the notice length is 3

months.

The Amendment Code provides for employers to terminate employment relationships with

immediate effect where employees have significantly breached the working discipline. The

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Amendment Code further provides for the employer to terminate an employment relationship

when the life/health of the employee would be directly endangered by his/her continuance in

employment.

With regard to termination provisions generally, a welcome feature of the Amendment Code

is its provision for entitlement of an employee who has been employed by the same employer

for 5 years and more, to a severance pay of a minimum of triple his/her employee's average

monthly wage subject to conditions stipulated by the Labour Code.

However, both employers and trade unions have complained about the amendment allowing

for the right to paid holidays for employees who would not have been entitled to them before

the implementation of the 2003 amendments authorised by the Amendment Act.

Discrimination Issues

The Amendment Act serves to promote equal treatment in workplace and occupation by

eliminating direct and indirect discrimination in labour relations. In that respect, employers are

prohibited from investigating the sexual orientation of employees 1&2. Furthermore, the

Amendment Act defines both direct and indirect discrimination and harassment is classified

as discrimination as well. The Act also grants employees a right of action against employers

for discriminatory acts in employment relations.

However, Trade Unions are concerned that the Labour Code does not provide as much

protection for pregnant women as it should. That is because, the Act prohibits employers

164

from investigating whether an employee is pregnant or not even though work in issue is

prohibited to pregnant women. Therefore, it would seem that the level of protection for

pregnant women is considerably low.

However, the Act allows pregnant women to inform the employer about their status voluntarily

in writing (and in that event the employer must take relevant action) and this does seem to

provide them with legal protection from work which might be harmful to their health.

Trade unions are also concerned that the new provisions of the Act addressing issues of

prolongation and renewal of fixed-term employment contracts will have a negative impact on

the labour force from the point of view that employers might tend to employ retired people

rather than non-retired people since they are more likely to work for lower salaries

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CHAPTER 10 - BUSINESS LAW ( SALE OF GOODS AND CONTRACTS)

SLOVAKIA

Sales of Goods

The Slovak law governs relationships between sellers and buyers of goods and is regulated

by the Commercial Code (Section 409 et. sec). Goods are defined as moveable things.

Therefore fixed and intangible property (as in the UK) are excluded.

However, sales of immovables are governed by the Civil Code. The following is a summary

of the salient aspects of the law relating to the sale of goods. This summary is intended to

highlight the similarities and differences between the UK sales of goods regime and that of

the Slovak Republic.

In a Slovak contract of sale, the seller undertakes to deliver the goods to the buyer (valuable

'consideration' in the common law sense, is not necessary) and is obliged to assign to the

buyer the title of the goods. The buyer then must pay the purchase price.

Goods can be individual (eg., a TV set), or generic (a consignment of rice) and fall into the

category of 'specific and 'unascertained goods in English law or

'specific' and 'unidentified' goods in the USA. A contract for the sale of goods might not exist

if a major part of the obligation of the party is to put the goods into a 'deliverable state'

(Section 410 Subsection 2).

Certain goods are “res extra commercium” (they cannot be an object of commercial

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transactions and include, human organs) and as in the UK, some goods may only be traded

under certain conditions (eg., weapons and drugs). Natural substances, where they are

controlled (eg., water and gas) may be classified as 'goods'. However, securities are not and

are able to be traded under the Securities Act.

The Element of Bargain

46As set out in the Code, the 'consideration' for the transfer of the title to the goods and their

delivery to the buyer, consists of the purchase price. The contract therefore must include

include the purchase price, or a method for determining it at a later date. As such the seller's

duties by law are as provided in Section 411 of the Code: “The seller shall undertake to

deliver goods, to pass over the documentation related to the goods and to enable the buyer

to take title to the goods in accordance with the contract and this Act.”

Unless stipulated otherwise in the Agreement, delivery takes effect once the goods are

handed over by the seller to the first carrier where the contract requires the seller to dispatch

the goods to him/ her.

Condition of the Goods

These are specified in the Code (which is similar to the UK Sale of Goods Act in its provisions

- as described later on) and relate to the quantity, quality, delivery and packaging of the

goods:-

46Section 411 - Commercial Code

167

“The seller undertakes to deliver the goods in the quantity, quality and execution as

stipulated by the contract and must arrange for the goods to be packed and made

ready for forwarding in a manner stipulated in the contract.” (Section 420 Subsection

1).

Save that the parties may agree otherwise, the Code specifies that the seller must deliver the

goods to the quality and fit for the purpose stated in the contract. Where goods are delivered

according to a sample, or pattern, as in the UK system, they will need to conform to the

pattern, or sample.

Defective Goods

These are goods which are factually, or legally defective. The Commercial Code does not

expressly use the term “factual” defects (provisions of Section 422 and following), however,

only “legal” defects (provisions of Section 433 – 435).

Goods can be factually defective where the packing or the documentation required for

the use of the goods is defective. They are legally defective where seller's title to the goods

may be defective. For example, where the seller does not own the goods.

The seller is not liable to the buyer, if materials used in the production of the goods were

defective and he was not aware and exercised reasonable care in checking the goods for

such defects, or the buyer had consented to the defects. But the seller is liable to the buyer

under the contract and the seller is liable ordinarily for guarantee the quality of the goods, in

terms of latent defects attributable to him/her, even when risk of damage passes to the buyer.

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In order to claim the rights arising from defects in the goods, the buyer is obliged to let the

seller know as soon as possible.

Claims for Defective Goods

If there is a serious, or fundamental breach of the contract (for example, the goods are

defective) in terms of quantity, or quality, etc., then the buyer may require the seller to remove

the defects either by replacing the defective goods, or removing their legal defects, or making

up their defective quantity. The buyer may require the goods to be repairs to cure the defects;

ask for a discount from the purchase price, or reject the contract.

Under Section 345 Subsection 2 of the Code: “…a breach shall be deemed fundamental if

the party breaching the contract knew or could have anticipated at the time of its conclusion

from the contents of the contract or the circumstances under which it was concluded, that the

other party would not be interested in the performance in the event of a breach of the

contract. If in doubt, it shall be presumed that the breach of the contract is non-fundamental.”

If the breach is non-essential (i.e, a 'warranty') the buyer may require the delivery of missing

goods, require the removal of the defects, demand a discount from the purchase price.

Delivery of a Larger Quantity of Goods

Where more goods than ordered are delivered, then the buyer may choose to accept them,

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or to reject them. If he accepts them, he acknowledges that he will have to pay for them

based on the purchase price.

Passing of Property/ Ownership

Ownership to the buyer passes as soon as the goods are delivered. Ownership may also

pass to the buyer prior to delivery where he/she receives the agreed documents of ownership

on the basis that the goods are clearly ascertained.

It is also possible for ownership to pass even where the goods are not owned by the seller.

“The buyer shall acquire the ownership rights even in the event that the seller is not

the owner of the sold goods, unless at the time when the buyer was to acquire the

title to the goods the buyer knew that the seller was neither the owner, nor

authorized to sell the goods.” (Section 446)

This conflicts with the Civil Code though as the Civil Code follows the principle that no one

can transfer more rights on to another person than he or she has unless this is by

inheritance.

Obligations of the Buyer

The buyer must pay the price and take delivery of the goods. Where the purchase price, or

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the method of working it out is set out in the contract, the seller may demand a price based

on the purchase price of comparable goods.

Passing of Risk

In Slovakia, INCOTERMS (model terms for international trade contracts issued by the

International Chambers of Commerce) are normally used in international trade agreements

for the sale of goods and for defining the 'passing of the risk'.

Generally, the risk of damage to the goods ('passing of the risk') passes to the buyer upon

the taking of delivery of the goods directly, or to his/ her specifications, or on when he/she

should have taken delivery in accordance with the contractual terms and the goods were

freely able to be disposed by the buyer, notwithstanding that delivery was not been effected.

Where the seller engages a carrier to forward goods to the buyer, then the risk of damage

passes to the carrier when the goods upon delivery to him/her.

For the risk to pass, the goods must be ascertained by being clearly marked as provided in

the contract, or otherwise agreed.

Remedies for Breach of Contract of Sale

Remedies are contained in Sections 373-386 of the Commercial Code. It id a defence to

prove that the breach was caused by extenuating circumstances (Section 373:-

Whoever breaches an obligation arising from a certain contractual relationship shall

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compensate the damage thus caused, unless it is proven that the said breach was

caused by the circumstances excluding responsibility).

Damages may be money (usual) for basically loss of the bargain (all losses flowing from the

breach) or, restitution. It is not possible in a contract to exclude liability for damages.

Generally, the Commercial Code must be followed in sales of goods agreements, however,

there are provisions for optional terms: trial purchase (Sections 471–472), price clause

(Sections 473–475), prohibition of re-export (Sections 739–741), arrangement on limitation of

sale (Sections 742–743), currency clause (Section 745), exclusive sale

contract (Sections 745–749).

As for the UK, Slovak law does not classify contract law as an independent field of law.

Contract law is linked to civil law, which specifies contracts, commercial law and also

employment, or labour law. Therefore, for certain types of contracts the

Civil Code (Act No. 40/1964, as amended) applies, others need to follow the

Commercial Code (Act No. 513/1991, as amended); labour contracts are governed by

the Labour Code (311/2001, as amended). There are also other less important Acts that

specify certain types of contracts - for example, the purchase of fixed property.

Application of the Codes

Civil Code

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The Civil Code provides more protection to a weaker party; on the other hand the

Commercial Code enables more freedom generally in contract relations and is geared

towards business to business dealings.

Commercial Code

The Commercial Code therefore governs the obligations between business parties, as well as

business to 'consumer' dealings. The hierarchy of the Codes in their application for sales of

goods is set out in the Code as follows:-

1. Commercial Code

2. Civil Code

3. Business Customs

4. Interpretations based upon applications of the principles of the Commercial Code.

Labour Code

“This Act shall govern individual labour relations in connection with employment of

natural persons by legal or natural persons, as well as collective labour relations.”

(Section 1(1) of the Labour Code).

This Code therefore is the authoritative law for all contracts regarding labour relations.

'Choosing' the Commercial Code

173

Parties may opt to use the Commercial Code provisions even where their obligations are

governed by a different Act. However, this consent needs to be in writing.

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Slovak Contract Law

General Characteristics

The requirements for a valid contract relate to matters concerning:-

· the subject

· will

· expression of will

· relation between the will and its expression

· object.

The subject (a party to the contract) must have legal capacity (Section 38).

The will (intention to enter into the contract) has to be freely given (no duress is allowed). By

Section 49a, an error of fact invalidates a contract and so does a misrepresentation. The

expression of will (performance of the contract and or the contract terms) need to have

certainty/ be clear or may invalidate the contract. Furthermore, there should be a clear

matching of the will and expression of will and

the object of the legal act has to be capable of being done from the beginning.

General characteristics of Contracts

The Civil Code specifies the form of contracts (Sections 43-51). Generally, contracts do not

have to be in writing, nor do they need any other specific form. No 'consideration' is

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necessary for a valid contract. Where a contract is not formed in accordance with the Code's

provisions, it is invalid.

Contracts generally need to be in writing, especially those dealing with immovable property. A

contract made in a written form can only be altered in a written form (Section 40 Subsection

2).

Offer

Offers follow the English model more or less in structure (Section 43a and 43b of the

Commercial Code and Sections 850 — 852 of the Civil Code). However

'offers' made to the whole world are not valid. Offers need to be made to one, or more

specific persons to be valid.

An offer is binding when it communicated to the offeree directly, or where it comes into an

area where he would, under normal circumstances, be aware of it (Section 43a Subsection

2). Therefore, if a letter containing an offer is delivered to a mailbox, or to a company, the

offer is valid and effective even though it is not read by the addressee.

Invitation to Treat

By implication, unless there is an intention to be bound by an expression of will, there is no

offer. Furthermore, in a self-service shop the property passes when the price for the goods is

paid. Up to then, the buyer can return the goods, but if he/she damages or destroys them

before the property passes, he/she will be liable to the seller.

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Withdrawal and revocation

Offers can be revoked before they have been accepted (or the time set for their acceptance

has expired), but are generally irrevocable otherwise and no consideration is necessary for

keeping an offer open.

Other Possibilities for the Termination of an Offer

This is regulated by Section 43b of the Civil Code and offers may be terminated, or deemed

terminated as follows:-

• where the time set for acceptance has expired;

• if no time was set - if the acceptance does not reach the offeror

within a reasonable time.

• when a rejection of the offer reached the offeror.

Acceptance

Acceptance must be timely and becomes effective from the moment it reaches the offeror

(Section 43b). As for English law, an acceptance must be communicated to be valid. It needs

to be delivered to the offeror directly, or to a place where he would be expected normally to

see it, or by the means he would normally be expected to receive it (ie. through an agent).

The Postal Rule does not apply and acceptance is valid from the time of its delivery (or

deemed delivery). It may be withdrawn if the withdrawal is communicated to the to the offeror

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before or at the same time that it would have become valid.

Late Acceptance

An offer becomes invalid generally if it is not accepted in the time fixed for its acceptance, or

a reasonable time. However, there are some exceptions, mainly to do with the action of the

parties in communicating acceptance where the usual modes are frustrated.

In Slovak law, silence in any situation cannot amount to acceptance.

Counter Offer and Battle of Forms

Slovak law requires a strict matching of and acceptance. Therefore where there are even

slight changes in an acceptance, this constitutes a counter offer and invalidates the previous

offer.

Formation of a Contract

Contracts are effective when an offer is accepted, or when all formalities making such offer

and acceptance lawful, have been finalised (eg., the obtaining of licences, or permissions).

Privity of Contract

By Section 50 of the Civil Code, contracts may allow third parties to have rights in them

where third party agrees to that. There is no need for consideration and parties may conclude

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a contract to the benefit of a third person.

Contracts to Enter into Contracts

Unlike common law, the Civil Code permits contracts of intention to contract, valid and

binding (Section 50a of the Civil Code). If no contract is entered into

within the time limit specified in the agreement, either party has a right to damages. However,

if the circumstances upon which the 'agreement to agree' was based have changed since

entering into it, then a defence may be that it is 'unreasonable' for the other party to demand

performance.

Commercial Contract to enter into a Contract

By Section 290, Subsection 1: Section 290 Subsection 1: “The party obligated to conclude

such a contract, must do so without undue delay after having been invited to do so by the

entitled party, in accordance with a written pledge on the conclusion of a future contract”.

In these circumstances, the court can decide on the content of the future contract and award

damages to the aggrieved party. These provisions would also apply to agreements to add

other terms, or to change the contract in some way (Section 291/ 292).

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Specified Contracts

Some contract have special rules and these are set out in Chapters two to eighteen of the

Civil Code and include: travel contract (Section 741a – 741c), agency without mandate

(Section 742 – 746), contract for carriage (Section 760 – 773), contract for negotiation of

transactions (Section 774 – 777),contract on custody (Section 747 – 753), contract for

accommodation (Section 754 – 759), (bank) deposit (Section 778 – 787), insurance contract

(Section 788 – 828), association agreement (Section 829 – 841), pension contract (Section

842 – 844), etc.

Some specified contracts' provisions set out in the Civil Code are optional and are called

'innominate contracts'. However, their terms may not generally contradict the contents of

purpose of the Civil Code.

Consideration

Slovak law allows gratuitous contracts (eg., donative contracts - Section 628 - 630) and no

special form (eg., 'deed'), is required.

Implied Contracts

In Slovak law, an 'agency without mandate' - taking care of someone else’s property,

business, or affairs, without their specific request, creates this agency. The first category of

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agency is one where there is imminent danger to the other party's interests as aforesaid and

the agent acts to safeguard them (Section 742). Here the agent must be compensated for his

time and trouble even if his activities (in good faith) did not achieve the desired result.

In the second category, where there is no imminent danger, the agent must wait for the other

party's consent and may be held responsible for the other party's losses if he acts before the

consent is given. However, the other party is not allowed to benefit from the efforts of the

agent even where the agent acted without consent.

Offer as a Public Promise

For a public promise to be valid, it must be address to one or more specific persons. The

Civil Code states: the public promise binds a person, who makes the public promise to pay a

reward or provide some other performance to one or more persons from the public

(unspecified number of persons) who meet the conditions stated in the public promise

(Section 850). The reward may be successfully claimed in court.

Rejection of Contracts

Repudiation is allowed where specified in the Codes. For example: “In the event that a

debtor’s performance or a creditor’s performance is overdue, and constitute a breach of a

fundamental contractual obligation, the other party is entitled to repudiate the contract

provided that after having learned of such a breach, it informs the delinquent party without

undue delay. “ (Section 345 Subsection 1 of the Commercial Code).

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A fundamental breach of contract is where the party breaking the contract knew or should

have reasonably known that at the time to the breach that that the other party would not be

interested in the performance if he/she broke it. There is a presumption that breaches are

non-fundamental. As such the Code provides: “In the event that a debtor’s or a creditor’s

delay constitutes a non-fundamental breach of a contractual obligation, the other party may

repudiate the contract only in the case that the delaying party fails to perform its obligation

even within an additional reasonable period which has been provided for such performance.”

(Section 346 Subsection 1).

UK

General Characteristics of Contract Law

Introduction

This area of law is probably the widest and most complex in English law. In that regard, this

section is not intended to be a complete and comprehensive description of English contract

law as this would be outside the purpose and scope of this Book. The section, in summary

fashion, will however, identify the main aspects of contract law of importance in

understanding the key differences between the UK and Slovak system.

It is assumed that reviewers of this book will be already familiar with the leading cases in this

area, which are generally available and as such, where they are cited, references may not

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always be given.

What is a Contract?

A contract in English law is an agreement comprising the mutual obligations of two persons or

more which is enforced by law. This is a rough summary of what a contract is. Its nature is

set out in the Common Law.

General Requirements of a Binding Contract

Offer

As for the Slovak system, an 'offer' is an integral part of a contract. It is a proposition by a

party that he/she agrees to be bound if it is accepted. As for the Slovak system, it maybe

made to a person, or persons, or the world at large. However, an offer to the 'world at large',

unlike the Slovak system, does not need to be addressed to specified persons to be effective.

As for the Slovak system, an invitation to treat is not an offer. Tenders/ Request for

Expressions of Interest, are not offers.

Acceptance

The rules for acceptance of offers and counter-offers to a great extent follow the Slovak

system. As such an 'acceptance' must by unconditional to be effective. Acceptance must be

communicated, so 'silence' cannot be deemed to be an acceptance. However, the offeror can

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prescribe when and in what mode an acceptance will be effective.

Promise to hold an offer Open

Unlike the Slovak system, a promise to keep an offer open is not binding unless the offeror

has provided consideration. In particular, unlike the Slovak system, an agreement to agree

later on is not valid.

The Postal Rule

For contracts made within the UK, acceptance of a contract made by post and is presumed

by the court to have been communicated from the time of the posting of the letter. This rule

does not apply to international sales contracts. There is no such rule in the Slovak system.

Certainty

Agreements must be made on certain terms and will be invalid if they are not. This is similar

to the Commercial Code's provisions. However, 'uncertain terms' can be made certain where

the parties agree that they will be bound by the decision of an independent third party in

respect of the matter.

Consideration

Slovak law does not accept that consideration is an integral part of a contract. In English law

it is and contracts/ promises without consideration may only be enforced if they were entered

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into by deed. The English contracts must have the element of a bargain and as such

consideration is essential. Consideration is roughly defined as a detriment to the promisee,

or a benefit to the giver of the promise. Consideration may be anything.- it is in effect, a

promise, for a promise ('if you do that, I will do that').

Privity

By far and large, only the parties to a contract are bound by it. However under the Contracts

(Rights of Third Parties) Act 1999,(Section 1(1)(b)) '..a person who is not a party to a

contract (a third party) may in his own right enforce a term of the contract if the term purports

to confer a benefit on him ..'. But, according to Section 1(2), Section 1 (1)(b): '.. does not

apply if on a proper construction of the contract it appears that the parties did not intend the

term to be enforceable by the third party.

The Act generally gives third parties wide rights to enforce contracts and this follows the

Slovak system.

The Important of Terms of Contract

Contracts a made up of terms and representations. Representations are not included in a

contract, but terms are those statements, which if broken, will entitle the affected party to a

remedy.

Terms may be 'conditions' - those which broken entitle repudiation of the contract and

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damages; 'warranties' - minor terms which if broken entitle damages only; 'innominate terms'

- which are classified upon their effect once they are broken. How the courts designate these

terms depends on the overall construction of the contract which will include the intention of

the parties. Terms may be implied by the courts (eg., to give a contract 'business efficacy', or

by statute (the Sale of Goods Act 1979 Section 14(2) provides an implied condition of

satisfactory quality).

Exemption Clauses

Exemption clauses are permissible, but are limited by the Unfair Contract Terms Act of 1977

(as amended). The Act does not apply to all contracts but only those that try to exclude or

restrict liability. The Act mainly applies to business liability for consumer sales and restrict

traders from limiting the application certain implied conditions (eg., satisfactory quality, fitness

of purpose, etc.) of the Sale of Goods Act. Slovak law attempts to regulate this aspect by

providing the structure of contracts for specified dealings in the Codes.

Signing of the Contract

The signing of the contract is authoritative and if parties to a contract sign it, they are bound

by it.

Misrepresentation

A contract may be invalidated where a party is induced to enter into it on the basis of a false

statement made by the offeror and addressed to the other party (a misrepresentation). There

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is no equivalent in Slovak law as under the civilian system, only the words of the contract

have effect on its validity by far and large.

For a misrepresentation, there must be a false representation of fact, or silence when

circumstances change whereby an earlier representation became incorrect, or a party is

under a strict duty to tell the truth (as in insurance contracts).

Remedies for Misrepresentation

The 'misrepresented' party has the following remedies:

Fraudulent Misrepresentation - where a party intentionally and willfully misrepresents, then

the party affected can repudiate the contract and claim damages. This is specified by the

Common Law.

Negligent Misrepresentation - or 'misrepresentation under Section 2(1) of the

Misrepresentation Act 1967': Section 2(1) states:-

'Where a person has entered into a contract after a misrepresentation has been made

to him by another party thereto and as a result thereof he has suffered loss… that

person shall be so liable… unless he proves that he had reasonable ground to believe

and did believe up to the time the contract was made that the facts represented were

true'.

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Innocent Misrepresentation - where there is no element of fraud, or negligence, the

aggrieved party may rescind the contract; affirm it; or achieve an 'indemnity' from the other

party.

Generally, misrepresentations make the contract voidable at the option of the misled person

who can

• refuse to perform the contract (available for both innocent and negligent

misrepresentation).

• defy any claim for specific performance (order by the court to force performance) - this is

available for both innocent and negligent misrepresentation.

• claim damages (available only for negligent and fraudulent misrepresentation).

Remedies for Breach of Contract

Discharge At Option of the Injured Party

For fundamental breach of contract, the party aggrieved has a choice to accept the breach

and affirm the contract, or repudiate the contract and sue for damages.

Damages

Damages are the usual remedy at common law for breach of contract. Damages must relate

to the loss caused by the breach, but the loss must not be too remote. Generally, losses

need to 'flow naturally' from the breach and as such reasonably foreseeable. Those which are

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not are usually not allowed.

Damages are intended to put the injured party where he would have been had the contract

been performed. So loss of profit is possible. As an example, I buy a special pen for UKP 1,

but it is not delivered. As a result, I lose the opportunity to gain UKP1 million and the seller

was aware that consequence if the pen was not delivered. He/ she would then be responsible

for not only the return of the UKP1, but also my loss of UKP1 million!

Damages depend on loss - no loss, no damages. However, exemplary damages are possible

where the defendant has behaved badly.

Duty to Mitigate Damage Suffered

There is a common law duty upon persons to mitigate their loss and failure to do so will be

taken into account in the assessment of damages. Therefore litigants need to behave

reasonably even after a breach.

Penalty Clauses and Liquidated Damages

A 'penalty' clause in a contract must be a genuine attempt to assess damages. It must be

'liquidated'. English law rejects penalty clauses. A penalty clause is generally one that is not a

genuine pre-estimate of the damages. This is not followed in Slovakia where penalty clauses

are allowed. For example if my loss in a breach would be UKP1, it is not allowed for me to

have a clause saying that the other party would be liable for UKP30 upon the breach as it

would not be a genuine pre-estimate of my loss.

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Contracts for the Sale of Goods

Sales of goods in the UK is regulated by the Sale of Goods Act 1893 (as amended) which

codified the common law and by the Section 62(2) Sale of Goods Act 1979 the Common

Law shall continue to apply save that it is not inconsistent with the express provisions of the

Act

The Act defines the obligations of the parties where they have not agreed specifically upon

the matters in question.

The Nature of Goods

'Goods' are defined in Section 61 as: -

“..'goods' includes all personal chattels other than things in action and money, and in

Scotland all corporeal moveables except money; and in particular goods includes

emblements , industrial growing crops, and things attached to or forming part of the

land which are agreed to be severed before sale or under the contract of sale and

includes an undivided share in goods..”.

Generally though, goods are defined as things people would ordinarily consider to be goods,

eg., fridges, TVs, etc. and this follows the Slovak system more or less.

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Contract for Sale of Goods

This follows the Slovak system as a contract for the sale of goods is where: (Section 2(1): ' ..

the seller transfers or agrees to transfer the property in goods to the buyer for a money

consideration, called the price..'.

Goods may be 'specific', or 'unascertained'. Specific goods are defined in Section 61 as:

'goods identified and agreed on at the time a contract of sale is made .... Unascertained

goods are not defined by the Act, but this definition refers to such goods that are identified in

the contract of sale and as such includes generic goods by application of the common law.

Passing of Property

When property in the goods passes depends on the classification of the goods. For specific

and ascertained goods, property passes when the parties intend it to pass (Section 17(1).

Where the parties do not indicate when they intend the property to pass, then the Act gives

rules as to when the property will pass, the main rule of which is (Section 18, rule 1):

“Unless a different intention appears, the following are rules for ascertaining the

intention of the parties as to the time at which the property in the goods is to pass to

the buyer'.

Passing of Property in Unascertained Goods

For unascertained goods, normally, property cannot pass until those goods have been

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ascertained: ( Section 16). Once the goods have become ascertained the property in the

ascertained goods will pass when the parties intend it to pass (Section 17(1). However,

where such goods have been appropriated to the contract and put into a 'deliverable state'

(eg., separated out from bulk and made ready for shipment, etc.,) and the parties have not

indicated when the property would pass, Section 18, Rule 5 (1) , states: '... the property in

the goods then passes to the buyer ..

Risk

Section 20(1) states: “Unless otherwise agreed, the goods remain at the seller's risk until the

property in them is transferred to the buyer, but when the property in them is transferred to

the buyer the goods are at the buyer 's risk whether delivery has been made or not.”

Implied Terms

Section 13 provides that where there is a contract for the sale of goods by description, then

there is an implied term that the goods will correspond with the description. Section 13 also

applies to the packing and location of goods.

Commercial Sales

Where goods are sold 'in the course of a business', then Section 14(2) - goods must be of a

satisfactory quality in the view of a reasonable person - and Section 14(3) - goods must be

fit for their purpose - apply. 'Course of a business' is defined by the intention of the parties

and the overall construction of the agreement. Generally though, if a business sells anything,

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in any way, that is connected with the business, this would be a “sale in the course of a

business. 'Fitness for the purpose' relates to circumstances where the use/ purpose for

which the goods are bought are communicated to the seller before the contact was

concluded.

In both cases buyers can waive their right to enforce the conditions and if knowing the

defective condition of the goods before the contract, enter into the contract, then they will not

be able to avail themselves of the protection of the Act.

Modification of Remedies for Breach of Condition in Non Consumer Cases — Section 15A

Section 15A(1) provides that in business purchases a buyer may not be able to rely on

Sections 13, 14, or 15 where the breach is so slight that it may not be reasonable for him to

reject the goods. In these circumstances the court may treat the breach as one of 'warranty'.

Exclusion of Terms in Consumer Contracts

Section 6(2) of the Unfair Contract Terms Act 1977 states:-

As against a person dealing as consumer liability for breach of the obligations arising from

sections 13 or 14 Sale of Goods Act 1979 cannot be excluded or restricted by reference to

any contract term.

Further, Section 6(3) states: as against a person dealing otherwise than as consumer liability

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for breach of the obligations arising from sections 13 or 14 Sale of Goods Act 1979 can be

excluded or restricted by reference to a contract term, but only in so far as the term satisfies

the requirement of reasonableness .

Acceptance of Goods

Section 35(1) the buyer is presumed to accept the goods when he/she:-

i) tells the buyer that the goods are acceptable and accepted by him;

ii) if he/ she does an act inconsistent with the seller's ownership - for example sells the goods

onwards, etc.

Section 35(4) provides that where a buyer does nothing after accepting the goods and a

reasonable time has passed, he is deemed to have accepted them.

English Contract and Commercial Law — Legal Procedure Note

Procedure in the civil (non-criminal) courts are governed by the Civil Procedure Rules (CPR)

made under the Supreme Court Act 1981. They are extensive and to a great extent

substantially modify and extend the common law in the application and effect of disputes

regarding contracts and sales of goods. It is to be noted that the procedural rules obtaining in

the United Kingdom differ considerably from those in the Slovak Republic.

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CHAPTER 11 - THE LAW OF TORTS AND THE SLOVAK LAW OF

OBLIGATIONS

ENGLISH LAW OF TORTS

The Law of Torts concerning 'negligence' is linked to almost every aspect of commercial law.

Torts law is that area is practically synonymous to negligence as litigation in this area of law

overwhelmingly concerns negligent acts. Slovak law has no equivalence to the law of torts.

However, due to the pervasive nature of the law of torts, especially as it relates to breaches

of 'obligations' in English business/ contract law and in particular, its acceptance as an

applicable and important legal principle, in the decision-making processes of the EU courts, it

is presented here so as to enable this comparative study to be made in context. In this

Chapter the important area of intentional torts relating to 'interference with goods' will also

be presented and finally, there will be a summary of the relevant aspects of Slovak law which

may be considered similar, or dissimilar to the tortious principles presented here.

Nature of Torts Law Generally

Torts law generally concerns situations whereby the common law imposes a duty upon

individuals to be considerate to each other and not to cause others harm through

inconsiderate, or 'wrong' acts. Where individuals are found not to have followed these

principles, then they are required to compensate the parties affected by their failure to do so.

Redress is aimed at compensating the person affected for his/her loss - to bring the person

back to where they were, 'but for' the other's breach of duty, as opposed to the law of

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contract, where redress is aimed at the 'loss of the bargain'.

Torts law is set out in the common law as well in statute law.

Tortious Negligence

Tortious negligence consists of: 1) a breach of the duty of care owed to the defendant and;

damage caused and that damage is not too remote ; and the absence of 'policy' reasons by

which the English courts may not find tortious liability. Public policy concerns those principles

whereby the courts are reluctant to impose tortious liability as the justice to be done would be

likely to create greater problems for society at large. For example, it would not be possible,

for 'policy' reasons, to sue the government in negligence for failing to win a war. Nor would a

wife be allowed to sue her husband for negligence by his failure to deliver her a particular

type of orgasm).

Duty of Care

The concept of duty of care is best gleaned from the leading case of

Donoghue v. Stevenson [1932] AC 562 (HL). The facts were: Mrs Donoghue, the claimant,

went to a café in Paisley where her friend purchased a bottle of ginger beer, contained in a dark

opaque glass and an ice cream. Mrs Donoghue drank half the of the ginger beer and as she

poured the remaining half of the ginger beer into the glass, she saw the remains of a

decomposed snail come out of the bottle. As a result of this the Claimant asserted that she

had suffered from shock and gastro-enteritis. As Mrs Donoghue did not purchase the ginger

beer, she had not recourse to the law of contract for a remedy against the seller, or the

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manufacturer. So she sued the manufacturer in the tort of negligence and the court found for

her. Lord Atkin said:

“The rule that you are to love your neighbour becomes in law, you must not injure

your neighbour; and the lawyer’s question, who is your neighbour? receives a

restricted reply. You must take reasonable care to avoid acts or omissions which you

can reasonably foresee would be likely to injure your neighbour. Who then in law is

my neighbour? The answer seems to be, persons who are so closely and directly

affected by my act that I ought reasonably to have them in contemplation as being so

affected when I am directing my mind to the acts or omissions which are called into

question”.

Negligent acts need to be reasonably foreseeable and there needs to exist a 'proximity'

between the parties. For example in Watson v. British Boxing Board [2001] 2 WLR 1256 ,

during a boxing match, the Claimant, collapsed in the final round of the fight and had to be

taken to hospital for emergency treatment, but suffered permanent brain damage. He then

sued the British Boxing Board for negligence for not having the emergency equipment at the

ringside, which may have made his brain damage less extensive. The courts found for him,

stating that it was foreseeable and an inevitable consequence of boxing that medical

treatment was needed and as such it was reasonable that the Board should have emergency

equipment nearby for the kind of serious damage likely to be suffered by the boxers and also

that it was fair and reasonable to impose liability on the Board as the Board was soley

responsible for the medical arrangement at boxing matches.

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However, in imposing liability in respect of a duty of care, the courts will look at:-

a) probability of harm

b) likelihood of occurrence

c) weighed with the burden and practicality of catering for the event.

For example in: Bolton v. Stone [ 1951 ] AC 850 the Claimant was hit by a cricket ball which

came from the cricket field. He was in a street at the time. This kind of event has not

happened in some 90 years and although it was clearly foreseeable, the courts held that the

probability of harm was so low that it would be unfair to make the cricket club liable.

Upon the establishment of proximity and the duty of care owed, the Claimant must show that

there was a breach of the standards required (this is an objective standard, based on the

'reasonable man' which follows the 'neighbour' test in Donoghue v Stevenson) and the

breach caused his injuries.

The concept of the 'reasonable man' was revisited in Glasgow Corporation v. Muir [1943] 2

All ER 44 (HL), when Lord Macmillan said: '…the duty of care for the safety of others which

the law requires human beings to observe in the conduct of their affairs varies according to

the circumstances. There is no absolute standard, but it may be said generally that the

degree of care varies directly with the risks involved. Those who engage in operations which

are inherently dangerous must take precautions which are not required of persons engaged

in the ordinary routine of daily life. It is, no doubt, true that in every act which an individual

performs there is present a potentiality of injury to others. All things are possible, and indeed,

it has become proverbial that the unexpected always happens, but while the precept alterum

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non laedere requires us to abstain from intentionally injuring others, it does not impose

liability for every injury which our conduct may occasion…Legal liability is limited to those

consequences of our acts which a reasonable man of ordinary intelligence and experience so

acting would have in contemplation…The standard of foresight of the reasonable man is, in

one sense, an impersonal test…[but] [i]t is still left to the judge to decide what, in the

circumstances of the particular case, the reasonable man would have had in contemplation

and what, accordingly the party sought to be made liable ought to have been foreseen'.

Where negligent acts are performed by a skilled person, the courts look at what standard of

behaviour would be expected of a reasonably skilled person in that field. For example in:

Phillips v. William Whiteley Ltd [1938] 1 All ER 566 , a jeweller preformed piercing on the

ear and the Claimant's ears got infected and it was alleged by the Claimant that the

Defendant did not maintain the cleanliness expected of surgeons carrying out similar

operations. However the courts found that the jeweller should be judged not as a surgeon

but as a jeweller. However, it is to be noted that people in training are judged by the standard

of a person skilled in the art, not of a 'trainee'.

Children and the Standard of Care

In McHale v. Watson [1966] 115 CLR 199 Owen J said in respect of the standard by which

children are to be judged: ' the standard by which his conduct is not that to be expected of a

reasonable adult but that reasonably to be expected of a child of the same age, intelligence

and experience'.

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Proximity

The Defendant must be in a situation of proximity to the Claimant. This means that he/ she

should have reasonably foreseen the consequences to someone like the Claimant in terms of

his failure to take care. In Haley v. London Electricity Board [1965] AC 778 , where a utility

company was held liable for leaving a manhole uncovered without adequate warning for road

users. Although it had provided warnings for people who could see, there were no such

warnings for blind people and a blind person suffered an injury as a result. The courts held

that blind people were foreseeable pedestrians and imposed liability.

Proving Negligence

By Section 11 of The Civil Evidence Act 1968, convictions may be used as evidence in civil

proceedings: '..In any civil proceedings the fact that a person has been convicted of an

offence by or before any court in the United Kingdom or by a court-marshal there or

elsewhere shall (subject to subsection (3) below) be admissible in evidence for the purpose

of proving, where to do so is relevant to any issue in those proceedings, that he committed

that offence, whether he was so convicted upon a plea of guilty or otherwise and whether or

not he is a party to the civil proceedings; but no conviction other than a subsisting one shall

be admissible in evidence by virtue of this section. In any civil proceedings in which by virtue

of this section a person proved to have been convicted of an offence by or before any court

in the United Kingdom or by

court-marshal there or elsewhere:-

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He shall be taken to have committed that offence unless contrary is proved; and

Without prejudice to the reception of any other admissible evidence for the purpose

of identifying the facts on which the conviction was based, the contents of any

document which is admissible as evidence of the conviction, and the contents of the

information, complaint, shall be admissible in evidence for that purpose.

Nothing in this section shall prejudice the operation of section 13 of this Act or any

other enactment whereby a conviction or finding of fact in any criminal proceedings

is for the purposes of any other proceedings made conclusive evidence of any fact.

The Act therefore permits evidence of criminal prosecutions, or convictions to be used as

evidence in civil cases to prove negligence, or not as case may be. It is to be noted that the

burden of proof in criminal proceedings is on the basis of: 'beyond reasonable doubt',

whereby for civil cases it is: 'on the balance of probabilities'. Therefore evidence of a criminal

conviction based on the same facts and standards for guilt (though not conclusive), can be a

strong influence upon the court of the liability of the Defendant for negligence.

Res Ipsa Loquitur

This Common Law Rule allows claimants to say that what happened to them could not have

happened, but for the negligence of the Defendant. This shifts the burden of proof to the

Defendant.

To use the rule, the Claimant must show that the Defendant was in sole control of the thing

that caused the accident. For example in Scott v. London & St Katherine Docks Co [1865]

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3 H & C 596, a bag of sugar injured the Claimant when he was on the premises of the

Defendants and the court said:Erle CJ:-

“There must be reasonable evidence in negligence, but, where the thing is shown to

be under the management of the Defendant, or his servants, and the accident is such

as, in the ordinary course of things, does not happen if those who have management

of the machinery use proper care, it affords reasonable evidence, in the absence of an

explanation by the Defendant, that the accident arose from a want of care”.

Causation, Remoteness, Foreseeability of Damage

To be successful in a claim for negligence, beyond proving beyond reasonable doubt that

there was proximity and that a duty of care was owed, that there was a breach of such a duty

as the Defendants behaviour fell below what was to be reasonably expected, the claim needs

to show that the Defendant caused the harm and that it was not too remote.

Causation

The 'but for test' is used to establish non-remoteness/ causation issues. This simply assets

that, 'but for' the negligence of the Defendant, the Claimant would not have suffered injury.

For example, in: Barnett v. Chelsea & Kensington Hospital [1968] 1 All ER 1068 . Three

people shared some tea from the same flask. Shortly afterwards all of them started to vomit

and went to the accident and emergency department of the Defendant hospital. The doctor

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on duty did not treat all of them and later on one of them died as a result of arsenic

poisoning. However the court decided that the hospital was not liable as the Claimant did not

establish causation because death would have occurred even if the person who died had

been treated by the doctor at the time he attended.

Similarly in Wieland v. Cyril Lord Carpets Ltd [1969] 3 All ER 1006 , as a result of

the Defendant's negligence, the Claimant had to wear a surgical wire collar

which meant that she could not wear her glasses. Subsequently she fell and hurt her ankles

and sued the Defendant against whom the court awarded damages using the 'but for' test.

In multiple injury cases, the courts award damages on the basis of the actual damage caused

by the Defendant's negligence. For example in: Jobling v.

Associated Dairies [1981] 2 All ER 752 , the Defendant refused to award damages to the

Claimant who had suffered a back injury and later developed a spinal condition

which was totally unconnected with the original injury. The court found that the Defendant

was liable to the extent of the damage caused to the Claimant as a result of their failure to

award damages.

Remoteness of Damage

Damages may not be too remote. For example, in: Wagon Mound (No 1)

[1961] AC 388, the Defendants ship was in a harbour when the Defendants negligently

allowed oil to flow into the sea and the oil polluted the Claimant's dock and ship. The

Claimants were carrying out welding work on a ship carried on work thinking that this would

be safe. Molten lead from their work fell into the sea which caused a fire which destroyed the

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Claimant's dock and ship. The court held that the Defendants were not liable for the damage

as it was not foreseeable that the oil would ignite in the circumstances.

Vicarious Liability

Employers are vicariously liable (the employees themselves are not liable) for the torts of

their employees provided that the tortfeasor is an employee and was acting in the course of

his employment at the time. An employee is normally someone who is controlled and paid by

the 'employer' - who does not use his independent skill and judgment in the performance of

his tasks. However, who is an employee really depends on the facts in each instance. An

'independent contractor' is not an employee and therefore is not usually considered an

'employee' for the purpose of vicarious liability. However, in certain circumstances, employers

may also be held liable for the torts of independent contractors and Neill LJ in Alcock v.

Wraith [1991] 59 BLR 16 said: ' The main exceptions to the principle [to the liability of

independent contractors] fall into the following categories:-

· Cases where the employer is under some statutory duty which he cannot delegate.

· Cases involving the withdrawal of support from neighbouring land.

· Cases involving the escape of fire.

· Cases involving the escape of substances, such as explosives, which have been brought

onto the land and which are likely to do damage if they escape. Here, liability will attach

under the rule in Rylands v. Fletcher [1868] LR HL 330 .

· Cases involving operations on the highway which may cause danger to persons using the

highway.

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· Cases involving non-delegable duties of an employer for the safety of his employees.

· Cases involving extra hazardous acts'.

Generally, the courts give a wide interpretation to 'course of employment' situations. For

example in: Jefferson v. Derbyshire Farmers Ltd [1912] 2 KB 281 , where an employee

caused a garage to burn down through the smoking of a cigarette, the employers were held

vicariously liable for the damage. Employers may also be held liable for the intentional torts

of employees.

DEFENCES

The main defences to negligence are: 1) consent ( volenti non fit injuria ) - whereby the

Claimant is held to have freely consented to the 'breach' causing his/her injury, 2) illegal acts

- where parties are jointly engaged in criminal acts they cannot sue each other for negligence

causing injury - 3) contracting out - where an exclusion clause in a contract, or a notice of

exclusion, purports to negative negligence; and 4) contributory negligence - where the

Claimant is held to have been negligent in taking care of himself and damages are lessened

against the Defendant.

CONTRACTING OUT - A NOTE

By Section 2 of the Unfair Contract Terms Act 1977: (1) A person cannot by reference to

any contract term or to a notice given to persons generally or to particular persons exclude or

restrict his liability for death or personal injury resulting from negligence. 2) In the case of

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other loss or damage, a person cannot so exclude or restrict his liability for negligence except

in so far as the term or notice satisfies the requirement of reasonableness. The Act goes on

to define what is 'reasonable' which in the main refers to the fairness of the term being

imposed having regard to the circumstances and relationship of the parties. The burden of

proof for proving 'reasonableness is upon the asserted.

Liability for death and personal injury cannot be excluded, nor can the right to a court and the

due processes of justice.

INTERFERENCE WITH GOODS

The tort of wrongful interference with goods protects the rights of owners over their goods

and as such is relevant to commercial and contract law. The position was virtually totally

within the remit of the common law, but to a great extent has been codified by the Torts

(Interference with Goods) Act 1977 which main provisions are presented here:-

Section 1. Definition of “wrongful interference with goods - “in this Act “wrongful

interference” or “wrongful interference with goods” means conversion of goods (also called

trover ) trespass to goods negligence so far as it results in the damage to goods or to an

interest in goods, subject to section 2, any other tort so far as it results in damage to goods or

to an interest in goods. References in this Act (however worded) to proceedings for wrongful

interference or to a claim or right to claim for wrongful interference shall include references to

proceedings by virtue of Part I of the Consumer Protection Act 1987 (product liability) in

respect of any damages to goods or to an interest in goods or, as the case may be, to claim

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or right to claim by virtue of that Part in respect of any such damage.

s 4 Interlocutory relief where goods are detained: “1) In this section “proceedings” means

proceedings for wrongful interference. 2) On the application of any person in accordance with

rules of court, the High Court shall, in such circumstances as may be specified in the rules,

have power to make an order providing for the delivery up of any goods which are or may

become the subject matter of subsequent proceedings in the court, or as to which any

question may arise in proceedings. (3) Delivery shall be, as the order may provide, to the

Claimant or to a person appointed by the court for the purpose, and shall be on such terms

and conditions as may be specified in the order.

(4) The power to make rules of court under section [of the Supreme Court Act 1981]

or under section 7 of the Northern Ireland Act 1962 shall include power to make

rules of court as to the manner in which an application for such an order can be

made, and as to the circumstances in which such an order can be made; and any such

rules may include such incidental, supplementary and consequential provisions as

the authority making the rules may consider necessary or expedient..”

s 6 Allowance for improvement of the goods: “(1) If in proceedings for wrongful interference

against a person (the “improver”) who has improved the goods, it is shown that the improver

acted in the mistaken but honest belief that he had a good title to them, an allowance shall be

made for the extent to which, at the time as at which the goods fall to be valued in assessing

damages, the value of the goods is attributable to the improvement.

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(2) If, in proceedings for wrongful interference against a person (“the purchaser”)

who has purported to purchase the goods (a) from the improver, or (b) where after such a

purported sale the goods passed by a further purported sale on

one or more occasions, on any such occasion, it is shown that the purchaser acted in

good faith, an allowance shall be made on the principle set out in subsection (1)..”.

s 8 Competing rights to the goods: “(1) The Defendant in an action for wrongful interference shall

be entitled to show, in accordance with rules of court, that a third party has a better right than

the plaintiff as respects all or any part of the interest claimed by the plaintiff, or in right of

which he sues, and any rule of law (sometimes called jus tertii ) to the contrary is abolished..”.

s. 11 Minor Amendments: (1) Contributory negligence is no defence in proceedings founded on

conversion, or on intentional trespass to goods. (2) Receipt of goods by way of pledge is

conversion if the delivery of the goods is conversion. (3) Denial of title is not of itself

conversion.

s 14 Interpretation: “(1) In this Act, unless the context otherwise requires-

“enactment” includes an enactment contained in an Act of the Parliament of

Northern Ireland or an Order in Council made under the Northern Ireland

(Temporary Provisions) Act 1972, or in a Measure of the Northern Ireland Assembly,

“goods” includes all chattels personal other than things in action and money, “High Court”

includes the High Court of Justice in Northern Ireland. (2) References in this Act to any

enactment include references to that enactment as amended, extended or applied by or

under that or any other enactment definition repealed for all proceedings except family

proceedings within the meaning of Part v. of 1984c42 and proceedings to which Section 27

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(1) of 1984c28 (Admiralty jurisdiction) applies by SI 1991/724 (High Court and County Courts

Jurisdiction Order), Sch 1 (I) Para 1.

COMMON LAW CONVERSION

This area of law is relevant to commercial law and is an important part of the the law of tort.

A good definition of conversion is provided by Dixon J (obiter dicta) in the High Court of

Australia in : Penfolds Wines v. Elliott [1946-47] 74 CLR 204: “The essence of conversion

is dealing with a chattel in a manner repugnant to the immediate right of possession of the

person who has the property or special property in the chattel. It may take the form o a

disposal of the good by way of sale, or pledge or other intended transfer of an interest

followed by delivery, of the destruction or change of the nature or character of the thing, as

For example, pouring water into wine or cutting the seals from a deed, or of an appropriation

evidenced by refusal to

deliver or other denial of title”.

DAMAGES

The four heads of damages are: (1) nominal damages, (2) general and special damages, (3)

aggravated damages and (4) exemplary/punitive damages.

Nominal Damages

When there is tort but the damages are minimal, the courts will award 'nominal' damages as

damages in tort is geared up to bringing the party back to the position where he would have

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been had the tort not been committed.

General and Special Damages

These comprise (general) damage resulting directly by reason of the tort and (special)

damages which arise from the tort but which have to be pleaded (eg., medical expenses, cost

of repair, loss of earnings, etc.)

Aggravated, Punitive or Exemplary Damages

Where the courts feel that the Defendant has acted badly, or has profited from the tort the

courts will award punitive, or aggravated damages.

SLOVAK LAW OF OBLIGATIONS

As aforementioned, Slovak law does not have an equivalent to the English law of torts. It is

safe to say that the general principles which may appear to resemble those imposed under

the English law of torts may be found in the various codes, in particular, the Civil and

Commercial Code. Broadly speaking, the Civil Code provides for the statutory compensation

of persons suffering personal injury as well as damage/interference in respect of their

possessions.

However, whereas the law of Torts is uncodified and therefore largely a product of

the English Common Law system, the possibly similar Slovak law of obligations

is absolutely codified and the “obligations” which are defined in it do not in the main

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correspond to those which generally appear in the law of torts. The Civil Code, does,

however, provide for:

• Rights Related to Things (this is more akin to the English law of property, rather than the law

of torts)

• Liability for Damage for Unjust Enrichment

• General Law of Obligations.

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CHAPTER 12 - HUMAN RIGHTS LAW

SLOVAKIA

The Slovak constitution provides that international instruments on human rights and

freedoms ratified by the Slovak Republic shall overrule national laws. In that regard

and in the context of the following, the Slovak Republic is a full member of the

European Convention on Human Rights (ECHR) and has adopted all of its protocols.

The UK is also a signatory to the ECHR and has adopted the majority, if not all, of its

protocols which have been give the force of law in the local courts by the passing of the

Human Rights Act 1998. Unlike Slovakia, treaties need to be ratified by national law in order

to be enforceable in the local courts.

Independence of the Judiciary

Slovak courts are meant to be independent, impartial, and separate from the

executive (government organs). However, the closer relationship between the judges

and the Minister of Justice (as in the United Kingdom) does undermine the apparent

independence of the judiciary. The Minister of Justice can demote presidents and

Vice Presidents of the courts for any reason, although they can remain judges whilst

so demoted and there have been instances of this in the past. By practice, the Judicial

Council, an independent organization of lawyers and judges, recommends

nominations for presidents of courts whereupon the Minister of Justice nominates

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the recommended judge. So far, the Minister has denied nomination of only one of

the Council's recommendations. This practice is commended as it serves to increase

the apparent independence of the judges.

However, there appears to be still too close ties between the executive branch

(government) and the judiciary which fuels criticism both inside and outside the

Slovak Republic that judges are corrupt and controlled by the executive and that

there are inadequate safeguards in that regard. In the Slovak Republic, there is a

widespread perception that judge’s salaries are inadequate and due to the significant

restrictions placed upon them with regard to taking up other employment during

their term of office, there is a powerful incentive for them to take bribes to achieve

reasonable living standards for themselves and their families.

The close interaction between the judiciary and the executive can be seen in the

organisation of the Slovak Republic’s court system. The court system consists of local

and regional courts, with the Supreme Court as the highest court of appeal except for

constitutional issues. The separate Constitutional Court, which is not linked to the

Ministry of Justice, decides constitutional cases.

There is also a separate Military Court, whose decisions may be appealed to the Supreme

Court and the Constitutional Court. Further, by the Constitution, the President of the Slovak

Republic appoints Constitutional Court judges to 7-year terms based upon Parliamentary

nominations. Parliament also elects other judges, from

recommendations of the Ministry of Justice, and can remove them for misconduct.

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A serious issue affecting the interplay between the Slovak Republic and human

rights law as protected by the European Convention on Human Rights is that since

July 1st 2001, the Slovak Constitution has been amended by the government to

provide for no appeal against provisions of constitutional law. In the UK, there is no such

restriction.

Human Rights Protection for Individuals

By law, people in the Slovak Republic charged with criminal offences are entitled to

fair and open public trials. They must be informed of the charges against them and of

their legal rights; to retain and consult with a lawyer sufficiently in advance to

prepare a defence and to examine witnesses. Defendants enjoy a presumption of

innocence. They also have the right to refuse to make self-incriminating statements

and they may appeal any judgment against them.

Those suspected of a crime are presumed innocent during the appeal process, and if

that process lasts more than 3 years, the suspect will be released. Some critics aver

that this has led to the release of dangerous criminals who were able to manipulate

the appeals system to their advantage.

It is true to say that with regard to access to justice, there is generally a problem for

citizens who are disadvantaged economically, or poor, to obtain non-criminal legal

representation. Therefore it is becoming more difficult for some who may have had

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their rights violated to take legal action. In that regard, the Ministry of Justice has

implemented a program whereby free legal advice is offered in seven cities every

Wednesday for five hours. However, the Slovak government seems aware that more

still needs to be done in that respect to satisfy public criticism.

Legislation

The Report of 56th meeting of United Nations Human Rights Committee on January

15th, 2001 stated that the regulation of judicial independence in the Slovak Republic

does not meet the minimum standards required. In addition, the Report states that

the actions of the Slovak Government, which appeared to be politically motivated,

during the efforts to remove the Highest Court Chairman from his office by a public

accusation has seriously politicised and disunited the judiciary.

The government’s efforts to maintain significant influence in the judicial process are

generally viewed to have extended to efforts to influence the independence of

nongovernmental organizations, which are supposed to be independent from the bodies of

the state administration.

For example, on 21 February 2001 the Slovak government passed a proposal to amend Act

No 308/1993 for the establishment of the Slovak National Human Rights Center. This proved

to interfere with the independence this institution protecting human rights which

independence is guaranteed by international provisions (United Nations General Assembly

Declaration of 20 December 1993 — Paris Principles) and international agreement between

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United Nations and Government of Slovak Republic.

Judicial Administration

Despite the efforts of the majority of concerned and conscientious Slovak judges, the

Slovak legal administration system in 2001 was unable to cope with significant

delays in proceedings before them. As a result, the majority of judgments against the

Slovak Republic in Strasbourg related to complaints against delays in judicial

proceedings.

There is a perceived widespread indifference/ignorance among Slovak lawyers to

consider and/or investigate aspects of human rights law that affect their client’s

interests whether in commercial, or non-commercial issues. Further, there is a feeling

that human rights law is mainly concerned with the protection of the Roma

community and as such not worthy of any serious consideration. This issue has not

been adequately addressed by the law schools and profession in the Slovak Republic.

However, it is clear that the impact of membership of the European Union will serve to

mobilise Slovakia towards a more robust human rights regime.

PROTECTION OF THE ‘HUMAN’ RIGHTS OF NON-NATURAL PERSONS IN CIVIL

MATTERS & THE EUROPEAN CONVENTION ON HUMAN RIGHTS

In the UK it is acknowledged that human rights law form a separate and important area of law

that affects all aspects of our lives by creating a new level of protection. In this new

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development and in the particular context of the European Convention on Human Rights

(ECHR), human rights and ‘victim’ status are accorded to natural as well as non-natural ‘legal’

persons (eg., companies) and include protection for their civil as well as criminal law rights.

In Slovakia, this concept is in its infancy and local lawyers treat human rights law as an area

of law soley concerned with the protection of minority groups of natural persons.

This section therefore attempts to highlight the importance of human rights law in the

commercial field so that the experience of the UK in the main, from a comparative standpoint,

may be instructive to this area of law in Slovakia.

Applicability of Human Rights Law

The applicability of the ECHR provisions to civil issues as well as the inclusion of non-natural

persons (eg., companies) in the category of eligible ‘victims’, have created new and exciting

scenarios in human rights law. In that regard, although human rights lawyers and thinkers

have been much-focussed on the human rights of natural persons, the reality is that from

their inception, ECHR provisions have been equally concerned with non-natural persons

(companies, NGOs, trade associations, etc.). The wide ambit of human rights protection for

individuals therefore can be applied with equal force and certainty to non-natural persons.

There are no reported cases in Slovakia of non-natural persons claiming that their 'human

rights' have been infringed thus far, whilst in the UK, this is a growing area for corporate

lawyers and cases have been brought to the ECHR Court in that regard.

Origins of the European Convention on Human Rights

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The European Convention on Human Rights was drafted by the Council of Europe (CoE –

www.coe.int) a peaceful association of European states enjoying common spiritual and moral

traditions and committed to the rule of law and democracy. It is entrusted with the duty to

develop mechanisms for the protection of human rights. The work of the Council of Europe

has been important in the human rights sphere in its general aim of securing peace and

prosperity in Europe.

ECHR and Slovakia

The ECHR was signed in 1950 and came into force in 1953. It is the most effective and fully

developed system in the world and this is due to a large extent to the attitude of its members

towards human rights. Slovakia became a member of the CoE on 30 June 1993.

Joining the ECHR and Relevance to European Union Law to the ECHR

In order to become party to the ECHR, a state should first join the CoE. Furthermore,

adherence to the ECHR is one of the requirements for accession to the EU.

The Treaty on European Union of 1992 (Maastricht Treaty)’s Article F2 enacted that the EU is

to be bound by the rights guaranteed in the ECHR and in the constitutions of the member

states. As such human rights are now a general principle of EU law. Article F2 applies so that

in the interpretation/ application of EU law, ECHR principles shall be observed.

Contents of the ECHR

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The ECHR contains a list of civil and political rights such as the right to life, the prohibition of

torture, inhuman or degrading treatment, the right to fair trial, the protection of private and

family life, freedom of thought, conscience and religion, freedom of expression, freedom of

assembly and association.

Main Articles - around 59 Articles have been enacted, those not mentioned here are more

procedural in nature.

1 - State’s obligations to implement rights and freedoms locally

2 - right to life

3 - prohibition of torture and inhuman/ degrading treatment or punishment

4 - prohibition of slavery or forced labour

5 - liberty and security of a person

6 – right to a fair trial

7 - freedom from retrospective criminal offences and punishment

8 - right to respect of private life and correspondence

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9 - freedom of religion

10 - freedom of expression

11 - freedom of assembly and association

12 - right to marry and have a family

13 - right to an effective national remedy

14 - freedom from discrimination in respect of protected rights

15 - derogation in times of ware and public emergencies

16 – freedom from restriction of political rights of aliens

17 - right to restriction on activities subversive of convention rights

18 - prohibition of the use of permitted restrictions under the ECHR for improper

purposes (ECHR measures to be used only in the context of ECHR objectives)

Main Protocols - some 12 Protocols have been enacted, those not enumerated below have

been more or less concerned with restructuring and procedure.

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1. Art 1 - right to property

1. Art. 2. right to education

1. Art. 3. right to free elections

4. Art. 1. freedom from imprisonment for contractual obligations

4. Art.3 - right of a national not to be expelled from his state and to prevent him coming back

4. Art. 4 collective expulsion of aliens

6. Art 1 abolition of death penalty

7. 1 – freedom of expulsion of individual aliens

7. 2. right to criminal review.

7.3 right to compensation for miscarriage of justice

7.4 freedom from double jeopardy.

7.5 equality of rights of spouses.

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THE ‘MARGIN OF APPRECIATION’

The European Court of Human Rights (ECtHR) allows a certain margin of appreciation to

states in the implementation of their obligations. This means that the interpretation of certain

rights should take place within the particular political, legal, social or economic context of the

state concerned. However, this does not give states a blanket approval for that. As such the

ECHR has retained the right to review any relevant application to it for redress and definition

of the level of applicable European standard. The ECtHR in reviewing cases on the margin of

appreciation considers the importance of the right involved, the characteristics of the

European democratic societies which include tolerance and broadmindedness and whether a

European consensus exists ( Handyside v United Kingdom (1986) 1 EHRR and Modinos v

Cyprus (1994) 16 EHRR). In addition to this, states can derogate from human rights in cases

of emergency or war but any such derogation should be proportional. Derogations from

certain rights are not permitted such as in respect to the right to life or the prohibition of

torture.

APPLICATIONS FOR REDRESS/ COMPLAINTS AND ELIGIBLE VICTIMS

There is the possibility of state against state as well as individual complaints which are both

mandatory under the ECHR (Articles 33 and 34). Concerning individual petitions, these may

include natural or legal persons as well as NGOs or groups of individuals. In that respect,

under Article 34 (formerly Article 25), ‘victims’ as defined by the EHCR Court, are persons

who are at risk of or is actually and directly affected by the act or omission by the state

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( Marckx v Belgium (1797 2 EHRR 330) . Relatives of affected individuals are also victims:-

Professional associations, NGOs, trade unions - (as long as they can identify persons within

their body who are affected and who they are authorise to act for. For example, Christians

Against Racism and Fascism v United Kingdom (1980 21 DR) 138) – an association of

religious groups was held to fulfill victim status after a march planned the association was

banned. They had to show that one of their members had been affected by the band, pure

public interest litigation does not exist in Strasbourg.

Companies fulfill victim status without having to show that a member has been affected by

any act. For the purpose of Article 34, a corporation is a person with human rights (Autronic

AG v Switzerland (1990) – in the context of freedom of expression, and Yarrow v United

Kingdom (1983) 30 DR 155 – acts against the company were deemed to be acts against the

shareholders who were awarded ‘victim’ status – also in Agrotexim v Greece (1995) 21

EHRR 250.

Shareholders as victims under Protocol 1 Article 1 (right to property) – where the complaint is

about a liquidator, receiver, or is subject to a court order. Also where the complaint is outside

Protocol 1, Article 1 (eg., Article 6 - right to a fair trial) the court seems more prepared to

ignore the separate personality of the company (for example shareholders (especially if they

are majority shareholders) are likely to be held to be those doing their business through the

company. Acts aimed at the company’s property allow shareholders to have victim status

(Malmstom v Sweden (1983 ) 38 DR 18 ). In that case, the complaint alleged that the

expropriation of the land offended Article 1 1 of Protocol 1 (right to property) the Commission

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noted that the term ‘victim’ in Article 25 (now Article 34) indicated a person directly affected

by the act or omission which is at issue. The applicants were not majority shareholders, but

the commission found that by ‘lifting the veil’ they are entitled to claim that they are victims of

the measures affecting the company’s property. However, they (the shareholders) were held

to have no locus standii as the piercing of the veil would be permitted where it was impossible

for the company could not apply by virtue of its articles, or liquidator. In this case the

liquidator could, but did not act.

Ruiz- Mateos v Spain (1993) 16 EHRR 505 – shareholders and employees were ‘victims’

though the act of the state aimed at the company where shares were expropriated in an

Article 6 situation. The court held that a company was merely a vehicle through which the

shareholders did business. In that case the applicants held all the shares in the relevant

company and were a victim of unreasonable delays in civil proceedings.

GJ v Luxembourg (Application No. 00021156/93 (1996) – the applicant complained that

the liquidation of the company in which he owned 90% of the shares were not terminated

within a reasonable time (within Article 6 (1) with the result that he was compromised. The

proceedings took 6 years during which time he was disbarred from being a director,

shareholder or employee of a Luxembourg company for 2 years and his freedom of

movement was restricted. He complained about other things as well. The Court (Commission)

opined on shareholder’ standing as follows:-

Agrotexim was applied (that the victim status of a shareholder will be justified where it was

impossible for the company through its articles of association to bring a complaint to the

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Court. The Court found this condition satisfied as the complaint relates to the activities of the

liquidators.

The Court also found ‘victim’ status to be satisfied (within the meaning of Article 25 (now 34)

as he was a majority shareholder and was in effect carrying out his business through the

company and had a direct personal interest in the subject-matter at the time (see Ruiz-

Mateos above).

NON-NATURAL PERSONS LIMITATIONS AS VICTIMS

Due to the artificial nature of a corporation, not all rights guaranteed by the ECHR apply, for

example:-

Article 2 – right to life

Article 12 – right to marry

Article 3 – freedom from torture.

However, Article 6 (right to a fair trial); Article 8 – privacy; Article 10 – freedom of expression ,

Article 1 – right to property, all apply.

Individuals within companies – shareholders (all kinds) and employees all can enjoy ECHR

protection as victims.

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WHO CAN BE THE SUBJECT OF AN APPLICATION UNDER THE ECHR

Contracting States - ECHR rights can only be litigated against a contracting state, the

German concept of Drittwirkung horizontal effect does not apply as such (where a private

individual can action another on the ground that the other breached his constitutional right).

Private Individuals - horizontally - despite Drittwirkung’s non-application as such, the

contracting state is under an obligation to proactively secure those rights given by the ECHR

(eg., access to a court must be protected by law). For example in: Airey v Ireland (1979 2

EHRR 305) – the Court held that Article 6 may sometimes compel the state to provide legal

aid when the complexity of the procedure is such that without the assistance of a lawyer it

would amount to a denial of access to a court. In Marckx v Belgium (1979 3 EHRR 330) -

the Court held that the right to respect family life contained in Article 8 (1) created a positive

obligation on the state to ensure that when operating its domestic legal system it did so in a

way that allowed those affected to lead a normal healthy life.

Drittwirkung therefore more or less applies in the ECHR system and provides an effective

indirect remedy to compel the state to protect individuals against infringement of their rights

by private parties. For example, the state will be responsible/ liable if these rights are

breached by private parties.

SOME ECHR IMPORTANT RIGHTS

Article 6 - right to a fair trial:-

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Everyone in the state (include non-nationals) is entitled to a fair and public hearing within a

reasonable time by an impartial and independent tribunal established by law.

Criminal Law (lawyers please note – the Court may consider a ‘civil matter’ to be ‘criminal’ if

its effect is criminal in nature. Therefore some civil issues may be afforded criminal law

protection under this measure – (eg., Engel v Netherlands (No 2) 1979) 1 EHRR 706. ).

Those accused of a crime are presumed innocent until proved guilty according to the law and

have the following minimum rights:-

· To be informed promptly in their language in detail of the nature and cause of the

accusation against them;

· To have adequate time and preparation for their defence;

· To defend themselves in person or through legal assistance of their own choosing and if

they do not have enough money to be given free legal assistance if they want it;

· To have full rights of examination of witnesses equivalent to the other side

· To have the free assistance of an interpreter

In Delcourt v Belgium ( 1970 1 EHRR 355) the Court held that Article 6 would be interpreted

very widely by it as the right to a fair administration of justice holds such a prominent place

that a restrictive interpretation of Article 6 (1) would not correspond to the aim and purpose of

that provision. This is applicable to Strasbourg Court as well as national courts.

INDEPENDENCE OF THE JUDICIARY

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The Court is particularly fussed about the concept of a fair and impartial tribunal established

by law. It need not be a classic tribunal (eg., a Court), however, it must function

independently of the government and there must be guarantees to enable the court or

tribunal to function independently and that even a hint of dependence is avoided.

Generally there is freedom to choose a state-appointed defence lawyer, however (Article 15

(2) is a derogable right).

With regard to an Application for non-naturals, Article 6 has been developed to protect the

right of companies and their officers when they face criminal charges or are sued in the civil

courts (Saunders v United Kingdom (1996) 23 EHRR 213). Therefore,

Regulatory bodies/ ministries, as well as the courts have to ensure that the standards

necessary to comply with Article 6 are applied in carrying out their functions. State-owned

businesses (or businesses with a significant shareholding by the state) have to ensure that

their procedures comply with Article 6 or they will commit an unlawful act actionable under

ECHR by those affected. A public authority cannot exclude judicial review. Judicial review

must permit a review of the merits of the case as well (W v United Kingdom (1987 10 EHRR

29) otherwise a breach of Art. 6 may occur.

Alternative Dispute Resolution (ADR) proceedings potentially run foul of Art. 6 as there can

be no appeal to a court as such, but individuals may waive their right to a court by voluntary

submission to ADR. But there must be no element of compulsion there or their will be a

violation. Furthermore, Lawyers, Police and Judicial Officers with immunity from suit may now

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be challenged under Art. 6. The imposition of a fee to have access to a court is not a denial

of the right - however the fee will need to be reasonable.

WHAT THE COURTS AND LEGISLATORS HAVE TO DO TO COMPLY WITH ART.6

· Parties need to be on equal arms (access to documents and evidence) equal access to

presenting their case and freedom from limiting factors imposed upon by the court.

· There must be a right to a public hearing which can be restricted in a limited way (security,

public order, justice, etc.). Parties can waive their rights to a public hearing. Judgments

must be publicly pronounced.

· The tribunal must be independent from the government and the parties. In that regard (as

set out in Langborger v Sweden (1989) :-

· Appointment and remuneration systems for adjudicators must ensure their independence

(in the UK, a government minister appoints judges, this is in breach of Art. 6; the Secretary

of State appoints and pays lay members of employment tribunals was held to be in breach

of Art. 6 (Smith v Secretary of State for Trade and Industry (1999) [2000] IRLR 6);

McGonnell v UK (2000) The Times, 22 February, Application No. 00028488/95 - found

that the Bailiff of Guernsey is in breach of Article 6 because of his combined role as the

government, administrative and judicial officer on the island;

· The adjudicator should not be the investigator

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· There should be no actual bias, or appearance of bias.

Delays in Proceedings

The length of time for proceedings to constitute violations. This varies according to the

complexity of the proceedings. The more complex, and/or the more importance the issues is

for the applicant as well as the conduct of the authority will all be taken into account. Criminal

trials are required to be determined quicker than civil trials.

Generally, 3 - 9yrs on a sliding scale of complexity and urgency for trials would constitute a

violation of Article 6 rights. Where the issue regards compensation to the applicant, then the

court insists on short time scales for determination.

Presumption of innocence from criminality

Here the burden of proof is allowed to move in limited situations (eg., defendant can be

asked to prove that he acted reasonably and truthfully). In criminal matters there is a right to

silence and not to contribute to incriminating oneself. Evidence obtained through compulsion

is not reliable. In Funke v France (1993) 16 EHRR 297 the applicant failed to produce bank

statement in the course of enquiries into certain customs irregularities. In consequence, he

was charged with failing to produce the bank statements. The EU Court held that this was a

breach of Art 6 as he had a right not to incriminate himself and to remain silent. In the case of

regulatory bodies doing the statutory jobs (ie. The UK Law Society, Chamber of Advocates)

Saunders v United Kingdom (1996)23 EHRR 313 is instructive - concerned competition

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law. Evidence obtained under compulsion by a regulatory body may not be used in a criminal

trial against an applicant - this constituted a violation of Art 6. This only applies where the

information obtained under compulsion is used in criminal proceedings against the applicant

(reference: Abas v Netherlands Appl 27943/94 (1997) EHRLR 418 - here the Applicant was

required to produce tax in default of fines or imprisonment. However, no criminal proceedings

were brought against him as a result of the information he gave. No breach. A conviction for

failure to produce documents is a violation of Art 6 (Funke v France (1993 16 EHRR 297).

Search Orders - the court must act to protect the individuals in the context of Article 8 and 6 -

the way the search orders are sought and how they are executed must not contravene the

ECHR.

Self-incrimination and civil issues - this does not exist outside the criminal law even where a

measure of compulsion is used. (in - Westminster Property Management Ltd (2000) 05 LS

Gaz R 33) evidence obtained under compulsion was usable in civil proceedings = directors

disqualification issue.

A rticle 9 (right of privacy as they apply to corporations)

Right to respect of private life and family life home and correspondence. There must be no

interference from the state, or public body except as in accordance with law, interests of

national security (and similar) and as is necessary for the protection of life in a democratic

society. Wiretapping, search of one’s home, opening and censoring of letters all are potential

violations. In Hoechst v EC Commission (1989) ECR 2859) - this Article’s provisions was

extended to business premises. Followed in Niemietz v Germany (1992) 16 EHRR 97 . State

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interference may be more allowable where business premises are concerned.

Article 10 - freedom of commercial expression

This is a strictly enforced right. Everyone has the right to freedom of expression. However,

licencing is permitted by the state. Again there are the caveats for restrictions for the

purposes of national security, etc.. However, a free press cannot be restricted.

Prot 1,Article 1 - right to property (application to shareholders)

· Everyone (including shareholders) is entitled to peaceful protection of his property (shares

are property and shareholders can claim under the ECHR is something is done by the

state to affect the value of their shares).

· The state can provide for the registration of property rights.

· Public authorities may not interfere with property rights.

· Interference can be nullified by justification and the fair balance test - balance between

general, wider interests and those of the individual.

Article 13 – right to an effective remedy

By Article 13: "Everyone who has rights and freedoms under the Convention which are

violated shall have an effective remedy before a national authority, notwithstanding that the

violation was committed by a person acting in an official capacity" (this does not include the

legislator, so where the violation occurs because of legislation, there is no article 6

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guarantee). Article 13 therefore does not allow a state’s laws to be challenged in the

domestic courts on the grounds of being contrary to the convention. Furthermore, the state is

not under an obligation to incorporate the convention into its domestic law

An effective remedy is one that allows for an assessment of the claim and the possibility of

rectification. Self-regulating bodies, have been declared as not providing effective remedies

as they do not have the required level of independence. The extent of the effective remedy

required varies depending on the nature of the applicant’s complaint. The more serious the

effect of the breach, the stricter the effectiveness requirement.

The contracting states to the ECHR have an obligation under Article 1 to ensure that the

ECHR rights are secured in their domestic systems. Therefore persons affected are able to

obtain compliance with the ECHR at domestic level (the Strasbourg Court is a supervisory

court). The applicant must show that he has a good case that one of his ECHR rights has

been breached.

Article 8 - protection of Privacy

This relates to the physical, mental and moral integrity of individuals (and non-naturals).

There is no standard definition as to what the individual terms mean and this allows for wide

interpretation. In order to bring an action under Article 8, the applicant should first prove that

he is a victim and secondly that he suffered damage. It may be enough to prove that the

mere existence of legislation or practice constitute a threat that interferes with the enjoyment

of the rights in Article 8(1) provided that the person falls within the scope of the alleged

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violation.

PROCEDURE IN THE ECtHR

European Court of Human Rights (ECtHR) - replaces the Commission and the Committee of

Ministers (old structure) in its adjudication role. All the judges sit in their personal capacity

although appointed by the member states. Judges are equal to the proportion of state parties.

Sections of the Court

Each section is gender sensitive and takes into account the demography of the members and

its composition is fixed for 3 years. It sits either as a Committee, Chamber, or Grand

Chamber (within which the same balance is present). Each section has a President, assisted

by Section Vice Presidents. Each Section President is a Vice President of the ECtHR (they

are normally appointed by the Court for 3 years).

Committee - 3 judges (deal with admissibility of applications)

Chamber - 7 judges (consider admissibility and merits)

Grand Chamber - 17 judges. The President, Vice Presidents, Section Presidents and the

judge elected in respect of the state concerned sit as ex officio members. Remaining judges

are chosen by drawing of lots. When a Chamber has released its jurisdiction, its members

are not included in the Grand Chamber court (except the President of the Chamber and the

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judge who sat in respect of the state party concerned). It considers important issues or where

there is the possibility of conflict with a previous decision of the ECtHR. It can also respond to

advisory requests from the Committee of Ministers.

Appointment & Tenure of the Judges

Members of the Court are appointed for six years by the Parliamentary Assembly of the COE

and their number is equal to the member states of the CoE (currently 41). Judges cannot

engage in any activity which is incompatible with their appointment. They must retire at 70.

The appointment criteria refer to the independence and the high moral character of the

judges as well as to their qualifications.

Litigation/ Applications

Individual applications go directly to Strasbourg to allege a breach by a contracting state.

The Registry communicates with the applicant. It screens the application and then assigns

the case to a section of the Court. The President (each Section has a President) designates

a Judge Rapporteur (who is responsible for summarising the case and decides whether it

should go to a Committee or Chamber for admissibility). Admissibility criteria include the

exhaustion of domestic remedies and that the action should be brought within six months

from the date of the final decision in the domestic procedure.

In addition to these, the application should not be anonymous, incompatible with the

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convention or ill founded and the matter should not have been dealt with in a previous case

or be simultaneously considered similarly elsewhere.

Normal applications go to a Committee to be examined by 3 judges, one of which will be a

Judge Rapporteur, for admissibility. If admissible (a negative decision is final) then they go to

a Chamber. The Judge Rapporteur is the primary reference point for the applicant and he is

responsible for all the case management issues. Decision of the Court is by majority vote.

The Chamber decides on admissibility and merits. Decision is by majority vote. Once

admissibility is allowed, applicants are normally invited to submit further evidence from both

parties and claim for ‘just satisfaction’ under Art 41. Then the Chamber moves to a full

hearing on the merits. Procedure is adversarial and public. All evidence filed with the court is

publicly available. Legal representation is required for a full hearing. The COE has a legal aid

scheme to cover applicants who don’t have money. Application should be made when

submitting the case to the registry.

The Grand Chamber may take over a case referred to it at anytime. But if a party, or the

parties object, it remains with the Chamber. If the Chamber does the referral, the parties have

1 month to object. Any application to move to a Grand Chamber is considered by a Grand

Chamber panel of 5 judges.

Decisions are made upon the merits of the case. Once an application has been considered, if

no friendly settlement has been reached, the court will give its judgment by majority. Each

Chamber judge can append a statement or concurrence or disagreement.

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After a judgment is given, within 3 months, any party may ask for the case to go to a Grand

Chamber for review. Any application to move to a Grand Chamber is considered by a Grand

Chamber panel of 5 judges. The general Grand Chamber rules will apply for the engagement

of the case - serious issue of general importance, or a matter dealing with the interpretation

of the ECHR. Judgment is final after 3 months have passed and no Grand Chamber review

request has been made. It can be final earlier by consent of the parties.

Enforcement issues are dealt with by the Committee of Ministers. It must verify that the State

has complied with the judgment of the ECtHR. Since 1998, the Committee of Ministers

supervises the enforcement of the Court’s judgments by the defaulting (Article 46). The final

weapon is the expulsion of the state from the Council of Europe. However, it should be said

that most of the states accept the judgments of the Court and adopt legislative or other

measures to remedy the situation.

Procedure in the court is by written submissions initially. The court may hold a full hearing if it

wishes. Judgments will give reasons and be public. The Section Registrar works closely with

the Chamber to facilitate a friendly settlement between the parties where this is possible. The

court will also provide facilities in that respect. Stare Decisis - operates informally. An

interesting question though and one that is troubling many jurists is that, should there be the

right of appeal from a decision of the ECtHR? Currently, there is none.

DELAY IN CIVIL PROCEEDINGS AND ARTICLE 6(1) OF THE ECHR

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Slovakia as a contracting state to the European Convention on Human Rights (ECHR) has

had some 20 cases brought against it under Article 6 (1) of the ECHR. The overwhelming

majority of them, if not all, have been satisfied by Slovakia’s compensation to the Applicants.

Whilst in the UK, significant progress has been made to the speeding up of proceedings, in

Slovakia, significant delays are still a matter of course and much work is required to bring this

up to an acceptable level

In that regard, this section, using the UK example as a model, gives a brief analysis of Article

6 (1) which is intended to bear on the gap in this area of law in Slovakia.

Provisions of Article 6 (1)

Slovakia, as a full member of the ECHR is bound by Article 6 (1), which provides that in

determination of his civil rights and charges brought against him under the criminal law,

everyone is entitled to a fair trial. This concept of fairness extends to a person’s right:-

· to a hearing within a reasonable time

· to a Court which is independent and impartial

· fairness in proceedings before a Court.

Lawyers in the contracting States, in the UK and Slovakia, who hitherto have been despairing

of their inability to serve their client’s interests as a result of irrational delays in their Court

systems and/or unfair proceedings have been pleased to avail themselves of the apparent

panacea offered by Article 6 (1). However, UK lawyers, rather than Slovak lawyers are more

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willing to use the these provisions due to cultural issues which are that in the main Slovak

lawyers do not expect and trust a court to be 'just' and consequently feel that taking the state

to court just would not work. However, in the richer tradition of democracy obtaining in the

UK, lawyers are keener to explore and take advantages of the remedies afforded by Article 6

(1).

Article 6 (1) in general relates to the right to a fair trial and excessive/ unreasonable delays by

the court as well as administrative law systems. The ECHR and Article 6 (1) applies to

anyone who is present in the jurisdiction and suffers the violation. The remedy is available in

the Strasbourg Court when all national remedies have first been exhausted, or if there are no

remedies available locally. If there are remedies available, but which, however, do not allow

for fair reflection of the Claimant’s loss through the delay, then application to the Court in

Strasbourg may be made under Article 41 for ‘just satisfaction’. Here the Court will award

what it considers to be a just award. The ECHR has a system for providing for payment of the

Applicant’s costs in bringing proceedings before the Court.

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CHAPTER 13 - ENGLISH LAW OF TRUSTS

THE TRUST

The “trust” is a creation of the English court which dates back to the reign of Henry

VIII. It is a successor of a property device known as the 'use”. The word

“use” comes from the Latin, “ad opus” which means property held “on behalf of”

someone else. This is the nature of a trust which in essence is an arrangement under which

one or more persons (trustees) keep, or hold property for the benefit of other persons

(beneficiaries). In that scheme, the legal title to the property is separate from the equitable

title. The beneficiary has a right to compel the trustee to carry out the terms of the trust.

In the English legal system, trusts are mainly used in the commercial world for tax

management and it has no equivalence in Slovak law. Therefore a brief summary of some

important aspects of the law of trusts in the area of commercial law is set out below.

The Trustee

In the business arena, the trustee is usually a professional person employed

and paid to act. There are statutory provisions regulating his/her position.

Express Trusts

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These trusts are those that have been created specifically. They must be clearly defined and

'certainty' of intention to create a trust and subject matter and object (beneficiaries) are vital

features without which the trust will fail.

Implied Trusts

These refer to instances where the courts impose a trust under equitable principles. Here the trust

would arise from the moral aspect of equity which require persons to act with 'conscience'. They

comprise Resulting and Constructive Trusts.

Resulting trusts

These are trusts that are implied by the courts to give effect to the intention of the owner of

the property. For example, where objects are not certain, or the subject matter is uncertain,

then the trust property does not flounder, but is held on 'resulting trust' by the trustees (so as

to 'result' back to the owner, or his estate, whereby the courts have implied that where a trust

fails in this way, the owner would have intended the trustees to hold the property for him/ her.

Another example of resulting trust is where a person contributes to the purchase price of

property the trust would result to him in the proportion of his/her contribution.

Constructive Trust

This arises where the courts impose a trust in the interests of conscience. For example,

where a person unlawfully kills another, he/she will not be permitted to keep the property

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received as a result of the death. A constructive trust becomes effective whether the property

lawfully inherited.

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CHAPTER 14 - SLOVAK PROPERTY LAW

Slovak property law is in the 'civil' area of laws which attempt to regulate rights to things 'in

rem' (right to things), as opposed to right 'in personam' (rights over things). However, there

are hybrid categories which include rights to intellectual property, or rights to an inheritance

which are treated specially. As for English law, however, property law is concerned with

immovables and generally rights over them (eg., easements). Other types of 'property',

includes securities, are dealt with separately.

Property law in Slovakia therefore leans towards rights to immovable things, like land and

buildings. The disposal of these are regulated by a land registry called the 'Cadastre'. This is

similar to the UK Land Registry. However, it is possible to deal in land that is 'unregistered'

with regard to which UK customary, common law and equity have a rich part to play. This is

described in detail in the UK Property Law Chapter following.

Like the UK's system, Slovak property law deals with rights of:-

1) ownership

2) possession

3) pledge (or mortgage)

4) easements .

OWNERSHIP

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Ownership includes the right to hold a thing; use it and profit from it; to dispose of it.

The owner has the unfettered right to sell or damage the subject of his ownership. He may

also include it in his will, pledge it, or 'charge' it. Although this is similar to the UK system of

'fee simple', it is to be noted that only an 'interest' in land may be acquired, as all land in the

UK belongs to the Crown.

All owners, have equal rights and duties and enjoy identical protection (Article 20 of the

Slovak Constitution). However, some categories of property are deemed to remain in the

ownership of the State (eg., mineral resources, caves and similar things). This also exists in

the UK. These properties tend to be administered by special government departments, or

bodies formed under them, or by Act of Parliament. For example there are bodies that own

vast areas of natural lands/forests as a 'national trust' so as to preserve them for the

aesthetic (and possible tourism needs) of the nation. Furthermore, some properties, eg.,

buildings considered to be of historical, or other significance, may only be altered by

permission of the government.

47In the Slovak Republic, a foreigner (either a legal, or natural person) may own immovable

property in specific circumstances only. These include:-

· inheritance or marriage

· acquisition for the purpose of operating a branch office, etc.)

Due to Slovakia joining the EU, it is in a process of ensuring that its laws are are harmonised

47 Galandová Miriam and Klutch, Martin (2004), 'Slovakia: Acquisition of Real Estates By Foreigners'Tax Notes International, March 8, 2004.

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with those of the EU. As such an amendment to the Foreign Exchange Act

was recently passed. This amendment allows foreigners to freely acquire immovable property

in Slovakia. However, agricultural and forest land are excluded to the extent that a foreigner

wishing to purchase such land, post EU accession, must farm it for at least 3 years before it

can be owned by him/ her. By 2011, harmonisation laws require Slovakia to remove these

restrictions in respect of EU nationals and companies. However, presently, foreigners may

acquire immovable property in Slovakia via Slovak companies as a Slovak company is a

resident by Slovak law and as such may own immovable property including including

agricultural and forest land, without restrictions.

No such restrictions on property ownership exists in the UK.

POSSESSION

Possession mean the right to hold a thing - to keep it with the intent of having it for oneself.

This is a subsidiary right to ownership and the owner (only) may defeat such a right. Legal

protection is given to the 'lawful possession' who believes in good faith that the property

belongs to him. He/she may become the owner if he keeps it for an

uninterrupted period of three years in respect of moveables and ten years in the event of

immovables (in the UK, ownership by prescription is 15 years for immovables and 20 years

for moveables). In the UK, possessors, or 'occupiers' have rights which are protected by law.

For example for a landlord (lessor, or owner of property that is rented, or held on a lease by

lessees, or tenants) may not remove them without an order of the court. Married women who

occupy the matrimonial home also have rights of possession which may only be normally

defeated by an order of the court.

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The remedies available to owners and possessors in the event of the infringement of their

rights are: rei vindicatio and actio negatoria . Rei vindicatio allows the person deprived of the

thing to retrieve it from its unlawful keeper. Actio negatoria refers to the action in a court to

forbid the taker of the thing to continue his unlawful interference. In the UK, these orders may

roughly correspond to the power of the UK courts to pronounce the 'equitable' orders

whereby the court, applying equitable standards for the orders, would require a person to do

something, or not to do something. Failure to comply is a 'contempt of court' which attracts

arrest and imprisonment.

CADASTRE

The Cadastre is a register of geometric and legal information regarding immovables such as

lands, buildings, flats and nature reserves. Information recorded include: geometric/

geographical position and area; owners and their shares ; pledges or mortgages; easements;

charges - basically all transactions involving the property.

The registers are kept by the district cadastral offices in the regions. This is similar to the UK

Land Registry system which is described in more detail in the UK Law of Property Chapter

following.

Disposal of Property

The position is the same as for moveable, and immovable property. Disposal can be by

contract, will, or appropriation by judicial, or administrative decision. For movable things, a

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contract or similar would suffice. For immovables, in addition to a legal act like a contract, the

change in the rights must be registered in the cadastral registration of changes of the rights

to immovables for the disposal to be effective.

All contracts for immovables need to be in writing. This is similar to the UK system by far and

large.

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48CHAPTER 15 - ENGLISH LAND LAW AND EQUITY

Land in English law is defined by Section 205 (1) (ix) Law of Property Act 1925:

“ Land includes land of any tenure and mines and minerals, whether or not held

apart from the surface, buildings or parts of buildings (whether the division is

horizontal, vertical or made in any other way) and other corporeal hereditaments :

also a manor, an advowson and a rent and other incorporeal hereditaments, and an

easement, right, privilege or benefit, over, or derived from land; and mines and

minerals include any strata or seam of minerals or substances in or under any land,

and powers of working and getting the same; and manor includes a lordship, and

reputed manor or lordship; and hereditament means any real property which on an

intestacy occurring before the commencement of this Act might have devolved upon

an heir.”

Unlike the Slovak system, in the UK , land includes…”buildings or parts of buildings” , but

similarly includes not only the surface earth area but also areas above and below it (eg.,

mines and minerals).

In Elitestone Ltd v. Morris (1997) . Lord Lloyd said:

“An object which is brought onto land may be classified under one of three broad

48Elements of Land Law” Kevin Gray, Susan Francis Gray, Butterworths, 3rd edition

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heads. It may be (a) a chattel; (b) a fixture; or (c) part and parcel of the land itself.

Objects in categories (b) and (c) are treated as being part of the land.”

Notwithstanding, a buyer and seller of land may agree as to what is included in the 'land'.

ESTATES

Unlike Slovakia, all land in England is owned by the Crown. 'Owners' of land therefore only

gain an 'estate' in the land which gives them the right to the

management, enjoyment and disposition of the land for the period of time specified by the

kind of estate held.

The types of estates are:-

(1) The Fee simple estate

(2) The Fee tail estate

(3) The Life estate

(4) The Leasehold estate.

The Fee Simple is a freehold estate which is of indefinite duration. The “Term of

Years Absolute” is of fixed duration and by Section 1 (1) of the law of property act 1925 , “the

only estates in land which are capable of subsisting or of being conveyed or

created at law are :–

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· an estate in fee simple absolute in possession;

· a term of years absolute.”

and all other estates take effect as equitable interests.

As mentioned in the Slovak Property Law Chapter, equity does not feature in the Slovak legal

system, however, there exists a system of rights over property which are embodied in the

Code which serve to give similar rights to those expressed in the UK's system of equity.

LEGAL AND EQUITABLE INTERESTS IN LAND

To explain 'equity', before 1875 there were two court systems in existence in the UK - the

Common Law Courts and the Courts of Chancery. The Common Law Courts administered

property rights known as 'legal rights. The Court of Chancery administered 'equitable rights'.

Reforms to land law made in 1925 re-categorised these categories in a practical way.

All legal rights ownable in land is listed in Section 1 of the Law of Property Act 1925 and by

Section 1 (3) all rights not listed are equitable.

Law of Property Act 1925 (Section 1)

(1) The only estates in land which are capable of subsisting or of being conveyed or

created at law are:

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(a) An estate in fee simple absolute in possession

(b) A term of years absolute.

(2) The only interests or charges in or over land which are capable of subsisting or of

being conveyed or created at law are :-

(a) An easement, right or privilege in or over land for an interest equivalent to an

estate in fee simple absolute in possession or a term of years absolute;

(b) A rentcharge in possession issuing out of or charged on land being either

perpetual or for a term of years absolute;

(c) A charge by way of legal mortgage … and any other similar charge on land which

is not created by an instrument;

(d) Rights of entry exercisable over or in respect of a legal term of years absolute, or

annexed, for any purpose, to a legal rentcharge.

Interests in land encountered mostly in the UK are to do with mortgages/ pledges of land,

easements and rights of entry. Legal rights must be created by deed (a formal document

which must be witnessed). These aspects are codified in the Slovak system and are not too

dissimilar.

LAND CATEGORIES

Unregistered Land

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This is land where the title has not been registered and in order to show good title, the owner

needs to demonstrate unfettered ownership of the land 'root of title' by producing documents

in chronological order showing the history of title to the property 15 years at least so as to

allow the purchaser to see the link of ownership for that period. In the Slovak system, 10

years good possession will confer a 'good root of title'. In practice and philosophy, therefore,

the law is similar.

Third Party Interests

Like Registered land, Unregistered land attracts third party interests. These interests (like

easements and covenants) are the same as for Registered land, but their protection if

different. For example 'legal rights' which include legal easements, legal mortgages and legal

leaseholds automatically bind a purchaser whether he knew about them or not. In respect of

equitable rights, these would need to be registered as a land charge in the Land Charges

Register for them to be protected. If they are not registered, then, they will not be binding

against future buyers. In Slovakia there is similar system whereby certain rights over property

may be registered so as to prevent the property being dealt with without notice to the

chargee. However, this is not within the area of 'land law' as such and in tends to be

regulated by various codes. For example, an Exekutor, may 'charge' the property of a debtor

to prevent its disposal.

Overreaching

This concept applied to registered and unregistered land and refers to where equitable

estates in land are held on trust. In that event provided a purchaser of the land

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involved pays the purchase money to a minimum of two trustees, the equitable interests in

the land will be 'overreached' and as such converted into the money in the hands of the

trustees. This system does not exist in Slovakia.

Registered Land

Land registration means that 'root of title' does not need to be shown. 80 percent of land in

the UK is now registered.

The two estates that can be registered are the Fee Simple Absolute in Possession

(freehold) and a Term of years absolute (leasehold). No other estate can be registered. Only

leases for more than seven years are registrable. When the land is first registered, the Land

Registry investigates the title and assigns a grade of title to the 'owner'. This is similar to the

Slovak system.

TYPES OF TITLES

Absolute Title

This title means that the owner has a full fee simple which is subject only to

registered interests and overriding interests.

Good Leasehold Title

This title is given where the landlord's (giver of the lease) title cannot be verified. This means

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that it will be subject to any interests affecting it.

Possessory Title

This title is given where a person fails to give enough evidence of ownership on application

for first registration. The title is subject to all interests in existence on, or before the date of

registration.

Qualified Title

This applies to applications where there are fundamental defects in the title to be registered.

It therefore remains subject to all defects at the time it is registered.

INTERESTS IN LAND

Interests on the register take the form of:-

Registered Charges - mortgages

Minor Interests - these are rights which though not overriding, must be entered on the register

for them to be binding on a purchaser

Overriding Interests: these are interests which bind a purchaser, whether he/she knew of their

existence, or not, but which cannot appear on the Register. They are

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(Section 70(1) LRA 1925) mainly:-

· Easements and profits — eg, rights of way, right to fish, etc.

· Adverse possession — rights which have been in existence for 12 years or more;

· Rights under a trust - for example, an option to purchase the freehold in a lease

agreement was held to be such a right;

Non-registration

Where the application for registration has not taken place within two months of the date of

disposition the title goes back to the transferor who holds on trust (Section 1 Land

Registration Act 1997 ). Furthermore, interests registered in the meantime will take priority.

TRUSTS OF LAND

This comprises any trust of property where land is included (Trusts of Land and

Appointment of Trustees Act 1996)('TLATA'). Here the legal title to the land will be in the

names of Trustees (usually 2-4). Their powers are regulated by Section 6 TLATA. A trust of

land is a device normally used where the intended owner does not have legal capacity to own

the land, etc.. The Act is very flexible, but does not allow the settlor to provide for an

immediate sale of the property outwith the wishes of the trustees.

No such system exists in Slovakia.

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Co-Ownership

Co-ownership in land is where two or more persons own estates in land at the same time.

This could include, for example: -

· A husband and wife

· Cohabitants

· Friends who share

· Partners in a business.

There is no maximum for the number of persons who can co-own land, however, all co-

owned land must be held on trust. In Slovakia, how the property is held would depend on

what is specified in the contract for its disposal and a 'trust' does not exist.

When property is co-owned as a 'tenancy in common', the parties do not have rights of

survivorship and their shares, upon their demise, will pass to their heirs. However, where co-

owners hold as joint tenants, each outright, owns the whole. Therefore, the parties have

rights of survivorship, unlike a tenancy in common. Joint tenancies must have the following

characteristics:-

· Each has the same rights of possession to the whole as the other;

· Each must have an identical estate in the land

· Each must be able to claim his/her title in the same way;

· The interest of each must vest simultaneously.

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A joint tenancy may be changed to a tenancy in common by 'severance'. This may take

place during the lifetime of a co-owner.

DISPUTES BETWEEN PARTIES

Trusts by way of co-ownership are governed by the Trusts of

Land and Appointment of Trustees Act 1996 (TLATA) which sets out how disputes may be

resolved between the parties. In Slovakia property disputes are resolved via the ordinary

legal process.

MORTGAGE/ PLEDGE

There are specialised banks called 'building societies' which primarily exist to lend money to

people who wish to purchase property. Most ordinary/ high street banks now provide this

service. In Slovakia, mortgages, are given by non-specialised banks.

For the purchase loan, the lender gets an interest in the land of the borrower which becomes

the security of the lender and gives him/ her associated rights (which could include a 'power

of sale'). The interest acquired by the lender is called a 'mortgage” and as such the lender is

called “the mortgagee” (receiver of the mortgage) as he achieves the interest in the land. The

borrower is called the 'mortgagor” as he gives the interest.

Mortgages are created by legal charge under Section 87 of the Law of Property Act 1925 and

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by the Land Registration act 2002 is the only method for creating a legal mortgage of land.

To effect a mortgage, a deed is written which describes the land and states the conditions of

the mortgage. Once created it becomes a registered interest in the land.

Mortgages may be disregarded by law if they were effected by 'undue influence' - i.e., the

parties were not legally represented and were 'pushed into' it by the lender.

Where a mortgagor falls into arrears with the loan repayments, mortgagees have significant

rights which include: seizure of the property and a forced sale.

Equitable Right of Redemption

“The equity of redemption” is a phrase generally used to describe the rights of the mortgagor.

People generally refer to 'equity' in their property which refers to their “bit” of the property,

e.g., where a property is valued at L1 Million with a L500,000 mortgage, the mortgagor will

consider his “equity” to be L500,000.

The equity of redemption includes:-

• the right to redeem the mortgage

• the right to have burdensome terms removed from the contract

• the right to relief from an extortionate bargain.

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The court will void any clause that serves to stop the mortgagor from redeeming the mortgage.

OTHER CHARGES ON LAND

Easements - these are rights over property which include a 'right of way' for example. Legal

Easements must be achieved by statute, deed or registered disposition,

or by long use (20 years) which is known “prescription”). Equitable easements however are

granted by a written contract, or via proprietary estoppel (this is where owner of the

servient tenement verbally makes a promise to the owner of the dominant tenement and the

latter relies on that promise to their detriment. Here the court would enforce promise as it

would be unfair for the servient tenement owner to change his mind). Only these two types of

easements are enforceable.

Restrictive Covenants - these are promises by one owner of land to another owner whereby

he says that he will not do something on the land. They must be negative in character and

are binding. Breaches of them are enforceable in law and equity.

The restrictive covenant is required to be registered as a minor interest against the title of the

burdened land to be enforceable. In the case of unregistered land, restrictive covenants must

be registered under the Land Charges Act 1972 to be enforceable.

Similar 'charges' systems exist in Slovakia, but are enforceable under the Codes as contracts for

rights, etc.

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CHAPTER 16 SUMMARY OF FINDINGS AND CONCLUSIONS

The obvious differences and similarities of the two jurisdictions in business law and related

areas have been presented and summarised where relevant in an integrative and discursive

manner in the relevant chapters of this book. As such it is not proposed to repeat them here

as they have been already dealt with in some detail. However, what is considered to be main

aspects of differences arising as a constant thread in all the Chapters are summarised here

in order to assist the utility of the Chapters when considered on their own and the book in

general.

The finding of this book is that the main dividing aspects of the two jurisdictions and their

legal system relate to the underlying economic, sociological and philosophic traditions within

which both have their base. As such, the UK is a leading world power and senior member of

the EU. It is a relatively rich country and has been so for some time, enjoying a rich modern-

day tradition of democratic freedoms for its citizens and a dominant international outlook in

respect of its commercial activities as a nation. Conversely, Slovakia has an opposite profile

and is very much a developing nation with a tradition of communism and by implication,

oligarchic rule.

These key differences have fed the nature and aspects of the respective legal systems

resulting in significant differences between the two in terms of the application of the law and

process of justice. On the other hand, the main area of possible convergence relates to the

recent accession of Slovakia to the EU and the UK's membership which means that through

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the intervention and natural progression of the EU as a law-making and economic body, the

increasing convergence of the legal systems and business law areas will occur for the benefit

of both nations.

49Judge Peter Messite observes that the objectives of the civilian legal system and the

common law are essentially similar in that their reason for being is the speedy, just and cost-

effective determination of disputes. Whilst this is a reasonable observation, the statement

does not bear up when the actual progress of justice in the two jurisdictions is examined in

any detail when it becomes difficult, if not impossible, to see these principles in action. In that

respect, the main point of difference that can be observed is the aspect of judicial precedent

as due to the absence of this principle in Slovakia, judicial decision-making is largely

unpredictable and generally can be made predictable by unofficial incentives to the relevant

judge or administrative officer involved. Furthermore, generally, in the Slovak courts,

decision-making tends to be conservative and bureaucratic aiming towards the preservation

of the norm, as opposed to the delivery of justice. This is a reflection of the political past and

cultural norm obtaining as a result of recency of communist rule.

Due to the absence of a philosophy of judicial precedent, at most judicial and administrative

decision-making levels, matters are decided depending on who is the judge, or administrative

official attending at the time. Therefore, it is possible on the same facts of a case, to have

radically different decisions by judicial personnel on a revolving basis. Again, due to judges

not having come from the ranks of practitioners, they do not command the same stature as

their UK counterparts in terms of their ability as jurists and furthermore, complaints of

49Messitte, Peter (Judge) (1999), 'Common Law v. Civil Systems', ISSUES OF DEMOCRACY- an Electronic Journal of the U.S.

Information Agency. Vol. 4,

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corruption in Slovakia's judicial and administrative systems continues underly a source of

much frustration in the business and legal communities both inside and outside the

jurisdiction. In that regard, it is hoped that the impact of the EU will increase an awareness for

change, respect of the rule of law and the development of training initiatives for legal

practitioners and judges in modern legal practice and the administration of justice.

Copyright 2005. Slovkonsult Law Publications – all rights reserved.