(This essay was published in Hong Kong Economic Journal on 28 December 2016.)
On November 7 the NPC Standing Committee interpreted the provisions under Article 104 of the Basic Law to resolve the Legislative Council oath-taking row. Hundreds of lawyers marched in silent protest against the intervention. The hope and expectation among Hong Kong government officials, including Secretary of Justice Rimsky Yuen Kwok-Keung, and politicians on both sides of the political divide has been that Hong Kong’s own courts could settle the issue without an NPC Standing Committee ruling.
Since the case was already before Hong Kong’s courts, it was felt an NPC Standing Committee interpretation would undermine confidence in the city’s separate legal system. In the words of one legal scholar, it would cause “unprecedented destruction” to the city’s judicial independence and amount to forcing China’s “legal system and way of thinking onto Hong Kong.” According to another legal scholar, it would “destroy the rule of law and the two systems.”
Many warned that such an intervention by the central government would come at a heavy cost. It would erodethecity’sautonomyandunderminetheruleoflaw. One legal scholar asked: “How would any person or investor ever trust our judicial system if the judicial process could be pre-empted by a political process like that?”
Beijing’s contentious decision to opt for an interpretation of the Basic Law to resolve the insulting oaths of two legislators had both political and legal reasons. The political reason is straightforward. Beijing is prepared to go to the extent of setting down a bright line rule against advocating independence by public officials during solemn oath taking.
Such offences are treated as blatant contraventions of the “one-country” principle that are unacceptable to Beijing and will not be tolerated. These violations are important and urgent enough to warrant dispensing with local judicial procedures and decisions that could (and some would argue should) have been followed. In so doing, Beijing has tilted the delicate balance between “one country” and “two systems” towards the former.
For those who are concerned about Hong Kong’s high degree of autonomy under the Basic Law, this is seen as a blow to the “two systems” principle. An interpretation of the Basic Law that dispenses with legal procedure (especially when the case is already before the courts) for political reasons necessarily appears to be arbitrary to those who are familiar with (and cherish) the common law tradition of following judicial procedures and relying upon courts to make such judgments.
From a legal perspective, there is an inherent tension in anchoring Hong Kong’s common law system within China’s civil law system. These two legal systems have different approaches to the resolution of disputes that can be traced back to the different political circumstances that prevailed in England and France over 800 years ago.
The two countries chose very different strategies for law enforcement and adjudication. Specifically, they opted for different levels of control that the sovereign exercised over judges. France went in the direction of adjudication by royally-controlled professional judges, while England moved toward adjudication by relatively independent lay juries.
It is worth revisiting the history of the development of the two legal systems to help us appreciate our own circumstances.
In principle, the king would always prefer adjudication by a royal judge beholden to him. Juries reflected the preferences of the local community, not those of the king. Juries, unlike judges, could not be incentivized or controlled fully by the king. They were also more vulnerable to influence by local nobles than a royal judge. A royal judge would also not cater to the preferences of the local community.
Local nobles who wanted a jury system strongly enough had to fight or pay for it. As long as it was feasible to enforce a bargain to decentralize adjudication in exchange for taxes or peace, there were efficiency pressures toward such a bargain. The Magna Carta could be seen as such a bargain.
The different choices made in England and France in the 12th and 13th centuries are especially puzzling in light of the widely recognized observation that, at that time, the English king commanded greater power over his subjects than did the French king. In England, William the Conqueror prevented the creation of large contiguous land holdings to weaken the local nobles, an opportunity not available to the king of France.
The power of local nobles in 12th and 13th centuries was greater in France than in England, and their relations with the king were more like those between independent powers. A jury of notables in France would not be able to deliver justice when the interests of local nobles were involved.
What explains the different choices in legal design?
A central goal of a national legal system is to protect law enforcers from being bullied with either physical force or bribes by powerful local interests. In the Middle Ages, judges and juries faced both physical threats and financial incentives to cater to the preferences of local feudal lords.
When bullying is moderate, it is more efficient to leave the adjudication of disputes to independent local decision makers, such as lay juries, than to delegate it to possibly biased state-employed judges who are better insulated from bullying.
In contrast, when bullying is extreme, it is better to accept the distortions inherent in these state-employed judges, than to leave decisions in the hands of the vulnerable locals.
The politicization of justice may be necessary when the state is the only institution with enough military power to fight local bullies.
In the 12th and 13th centuries, the relatively more peaceful England developed trials by independent juries, while the less peaceful France relied on state-employed judges to resolve disputes.
Between the years 1100-1800, France experienced warfare 22 percent of the time, but England only six percent of the time. Weapons were constantly available in France to anyone who wished to subvert justice.
These differences in basic conditions persisted mainly because of the greater power of local magnates in France than in England.
In fact the French nobles were more afraid of each other than of the king and so it was better to delegate dispute resolution to the sovereign, even if he had his own stake in the matter. This would avoid providing hostile rival nobles an excuse to interfere in local disputes.
Feudal lords in England, in contrast, were less powerful and more afraid of the king than of their neighbors. As a consequence, they were willing to pay the king to allow them to resolve disputes locally since he had the power to protect local law enforcers. Without internal peace, a system of juries may not work. The adoption of royal judges was a sign of a weak King.
Both France and England thus opted for a system that was more appropriate for their own circumstances in delivering justice.
This analysis of common and civil law, with its emphasis on protecting the law enforcer, helps to explain many of the structural differences in the organization of the two systems.
It explains the rise of French codification in the 19th century, which involves greater reliance on specific “bright line” rules rather than broad principles for adjudication. A bright line rule is a clearly-defined rule or standard that leaves little or no room for varying interpretation. Many jurists often consider this as a defining element of the civil law system.
The purpose of a simple bright line rule is to produce predictable and consistent results in its application. It can be seen as an efficient attempt by the sovereign to control judges as his knowledge of individual disputes deteriorates.
The simplicity of bright line rules, and the possibility of verifying their violation, enables the king to monitor the performance and loyalty of judges and incentivize their efforts more effectively.
Codification naturally evolved from the original choice of royal judges over lay juries. Statutes and comprehensive codes are used as a primary means of ordering legal material, and there is heavy reliance on legal scholars to ascertain and formulate rules. Dispute resolution tends to be inquisitorial rather than adversarial. Prosecution is combined with judging. Trials tend to be a rehash of evidence uncovered. The role of appeal is more commonplace and is seen as a review of the written record for monitoring the consistency of judges’ performance.
Common law, on the other hand, relies on appellate judges who establish precedents by solving specific legal disputes. Dispute resolution tends to be adversarial rather than inquisitorial. By separating prosecution from judging, it underscores the importance of trials, in particular open trials. There is a heavy reliance on oral argument and the importance of precedent. Judicial independence from both the executive and legislature is central to this system.
The principle source of English law is historical precedent rather than the will of the sovereign. The judge’s role is limited to maintaining courtroom order, framing the questions the juries must answer, and ensuring compliance with the ground rules of court action.
In royal France, it is important to note that judges were beholden to the King through appointments, reappointments and bribes. Royal control over judges was not absolute because of the sale of office, which damaged the proper administration of justice and weakened the state.
In all these dimensions, common and civil law systems differ, and the difference can be plausibly traced to the fundamental choice of state-controlled versus independent justice.
Legal convergence and transplantation
A great deal of convergence between common and civil law systems in rich countries has been achieved as a result of three developments.
First, the adoption of comprehensive codification of the legal code in rich civil law countries has made the law much clearer. By accepting the rule of law, the sovereign accepts the impartiality of the law and gives up using the justice system to discriminate between friends and enemies.
Second, the expansion of public law and regulations in common law countries has made the common law system closer to the civil law system.
Third, in a more democratic political environment, juries are now less susceptible to pressure. Comprehensive codification implies their decisions are better aligned with the social preferences of the public.
Juries work better when they care about the community and are less vulnerable to the influence of local bullies.
Civil law systems work well when the preferences of the sovereign are close to those of the community, otherwise they become a vehicle for the sovereign to control judges politically and punish enemies.
As the accuracy of codes improves and local pressure on the judges declines, common and civil law systems tend to produce similar resolutions of specific disputes.
Civil law works very badly in dictatorships, where it becomes a method of control by a sovereign unresponsive to public preferences.
In autocratic societies, the power of the sovereign to control judges will politicize justice and lead to socially inefficient outcomes. Centralized justice is therefore less severe in democratic societies.
Still, civil law countries at the same levels of economic development as common law ones have less secure property rights, greater government regulation and intervention and higher levels of red tape and corruption, and there financial systems are less developed.
Some countries inherited their legal systems as colonies or by voluntary adoption.
When civil law is transplanted into an environment with a bad government, there is strong evidence that it will lead to more abuse.
The transplantation of common law does not suffer as much from this problem as the sovereign is less able to use the legal system for political purposes
These results explain the comparative effectiveness of common and civil law in securing property rights in different countries and markets.
Moreover, the transplantation of the two legal systems through conquest and colonization account for many crucial differences in social and economic outcomes even among the recipient countries. These differences tend to persist for a very long time, even centuries.
Legal Origins Perspective on the Interpretation of the Basic Law
France in the 12th and 13th centuries found it necessary to install a system of royal judges that evolved into the civil law tradition because powerful local interests prevented justice from being properly administered.
The appearance of pro-independence voices in official political organs like the Hong Kong legislature has triggered civil law-like instincts in the Chinese sovereign to safeguard the principle of “one country” through an interpretation of the Basic Law, without much regard for common law-like practices, because of the potential for uncertain judicial outcomes and procedural delays.
When the “one country” principle is threatened, the sovereign is naturally incensed enough to play roughshod over the autonomy of the “two systems.” This unavoidably compromises the independence of the local judiciary. The delicate balance necessary for a common law system to operate within a civil law system requires deep tolerance and mutual sensitivity and respect for each other’s prerogatives.
The Basic Law is the constitutional guide to the implementation of the policy of “one country, two systems.” Thus, from Beijing’s point of view, a rejection of a National People’s Congress Standing Committee interpretation of the Basic Law by Hong Kong amounts to a denial of the nation’s sovereignty over the city.
Interestingly, in the decision of the “Director of Immigration vs Chong Fungyuen” case, Hong Kong’s top court ruled that Chinese citizens born in Hong Kong enjoyed the right of abode regardless of the Hong Kong immigration status of their parents. By creatively drawing on a common law distinction, the top court split the Standing Committee’s interpretation of the Basic Law over the right of abode into two parts: the “binding reason” for the decision and the “nonbinding judgment” on a case. The Standing Committee’s interpretation applicable to the case was classified under the latter.
Consequently, the top court was able to rule that all those born in Hong Kong to mainland parents enjoyed the right of abode here. The Hong Kong Government did not challenge this judgment. In the following decade, more than 200,000 babies of mainland parents were born here. Ironically, this likely became one of the contributing factors that subsequently kindled local radical independence sentiments.
After the ruling, a Standing Committee spokesman expressed concern over the right of abode verdict, but only said gently that the ruling was not consistent with the interpretation. But it did not issue another interpretation to reverse the creative distinction drawn in the Chong Fungyuen case.
The issue at stake then was over the right of abode (an issue primarily of local concern), and not pro-independence politics—an issue of vital concern to the sovereign that threatens the “one country” principle. The consequences of the recent interpretation on Hong Kong’s governance are too early to tell. Like most, I think the fewer the interpretations, the better off we are. This will require greater circumspection and wisdom in our political actions.