Restatements

This column discusses restatements of law. It begins by explaining the nature of restatements, their impact, and why they developed in the US. It then explores their potential to inspire initiatives in other countries, including China.

Restatements of law in the US

Restatements are a creation of the American Law Institute (ALI), which was established in 1923 by a committee of prominent judges, lawyers and law professors. As noted on the ALI’s website (https://www.ali.org/), the committee reported to the members of the legal profession that the law was “unnecessarily uncertain and complex”. As a result, there was a “general dissatisfaction with the administration of justice”. The committee proposed the formation of the ALI for a number of objectives, including “to promote the clarification and simplification of the law” and “to encourage and carry on scholarly and scientific legal work”.

As part of these efforts, the committee suggested that the ALI should produce restatements of the law. A modern statement of the purpose of restatements of law is provided by the ALI on its website. The statement refers to two key projects in which the ALI has been involved during its almost 100 years of history: the production of restatements; and the production of principles:

Restatements are primarily addressed to courts. They aim at clear formulations of common law and its statutory elements or variations, and reflect the law as it presently stands or might appropriately be stated by a court. Principles are primarily addressed to legislatures, administrative agencies or private actors. They can, however, be addressed to courts when an area is so new that there is little established law.

One of the reasons why restatements have become so important in the US was explained in a speech delivered to the Judicial Institute of Hong Kong in 2017 by Justice Robert French, the former Chief Justice of Australia and now a Non-permanent Judge of the Court of Final Appeal in Hong Kong. Justice French noted that, unlike the High Court of Australia, which is the final court of appeal from all jurisdictions in Australia and declares the “one common law in Australia”, the US Constitution limits the cases in which the US Supreme Court and the federal courts may exercise appellate jurisdiction in respect of the US states. Justice French further noted that each state of the US has its own body of common law.

Since its establishment, the ALI has produced four series of restatements that cover a broad range of areas including agency, conflict of laws, contracts, trusts, property, employment and unfair competition.

Restatements are regularly cited by courts in the US. Although they are not legally binding, like codes, restatements are considered to be highly authoritative. US courts refer to restatements for a number of reasons, including to ascertain the current state of the law in the US, to support a development of common law principles, or simply to adopt a statement of a principle or proposition as formulated by a restatement. Restatements have also been cited by courts in other common law jurisdictions including the UK and Australia.

Interestingly, restatements in the US have attracted both supporters and critics. The critics generally fall into two categories, those who argue that restatements go too far in terms of stating the law as the ALI believes it should be instead of just stating the law as it is, and those who are argue that restatement are too conservative and do not go far enough in terms of stating what the law should be.

Restatements and principles are two tools that are commonly used to promote the harmonisation of laws and principles of laws. An example of an international set of principles that achieves this effect is the Principles of International Commercial Contracts, issued by the International Institute for the Unification of Private Law (UNIDROIT). These principles have played a significant role in the development of contract law in many jurisdictions, including the Contract Law of mainland China.

Another tool commonly used to promote harmonisation are model laws, such as the Model Law on Cross-Border Insolvency, issued by the UN Commission on International Trade Law (for a discussion of this model law, see China Business Law Journal volume 8, issue 8: Cross-border insolvency).

A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at www.vantageasia.com