Lloyd's Maritime and Commercial Law Quarterly
How the courts develop commercial law by looking outside the trial record into the external world
JD Heydon *
The thesis of this article is that the law does not, and should not, operate in a self-contained system in which legal reasoning consists solely of drawing logical inferences from key conceptions. Instead, particularly in commercial law, the courts must look beyond the law into the external world for information relevant to the performance of their duties in developing commercial law. The article first examines how far in practice the courts have gone beyond the trial record in searching for that information. Secondly, it considers some difficulties and dangers which the law faces in going beyond the trial record, for, although the existence of the duty to do so is inevitable, the methods by which it should or should not be fulfilled are not.
I. INTRODUCTION
Mainstream judicial method
Rudolf von Ihering was a celebrated nineteenth-century German scholar of Roman law. His relevance to the present topic lies in his ridicule of the type of legal reasoning which assumes a “Begriffshimmel”—a heaven of juristic concepts.1 In that place, said von Ihering, legal conceptions exist in “their perfect, unsullied purity and their ideal beauty”. There legal theoreticians could see “face to face, in absolute clarity, things that they had merely glimpsed in dim outlines on earth” in an “imperfect form” and a “crippled shape”.2 A Begriffshimmel in the common law would involve an analysis of leading cases so as to seek to grasp their underlying concepts, however murkily. Thereafter it would involve a process of purely logical reasoning in applying those concepts to particular controversies.
HLA Hart summarised von Ihering’s targets under five heads. First, “[e]xcessive preoccupation with concepts considered in abstraction from the conditions under which they have to be applied in real life”. Secondly, “[b]lindness to the social and individual interests which must be considered, together with other practical problems, in the use and development of legal concepts”. Thirdly, “[a] belief that it is possible to distinguish between the essence … and the legal consequences … of a legal rule or concept”.
* Justice of the High Court of Australia. I am indebted to Alexandra Eggerking, Ryan May, Kim Pham and Jane Taylor for their assistance.
1. Parts of “Im Juristischen Begriffshimmel”, from Scherz und Ernst in der Jurisprudenz (1884), are translated and set out in Morris R Cohen and Felix S Cohen (eds), Readings in Jurisprudence and Legal Philosophy (Little Brown & Co, Boston, 1951), 678–689.
2. Ibid., 679.
HOW THE COURTS DEVELOP COMMERCIAL LAW
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