ACCA F4 - Corp and Business Law (ENG)

Part A Essential elements of the legal system  2: Sources of law 23

Factor Advantage Disadvantage

Detail Precedent states how the law applies to

facts and should be flexible enough to

allow for details to be different.

The detail produces a vast body of reports

to take into account.

Judges often distinguish on the facts to

avoid a precedent.

Practicality Case law is based on experience of actual

cases brought before the courts. This is

an advantage over legislation which can

be found wanting when tested.

Unfair precedents may be created that

allow wrongdoing to be perpetrated.

2 Legislation

The second major source of law is legislation. This is also known as statute law and may take the form of

Acts of Parliament or delegated legislation under the Acts.

Statute law is made by Parliament (or in exercise of law-making powers delegated by Parliament). Until the

United Kingdom entered the European Community (now the EU) in 1973 the UK Parliament was completely

sovereign.

In recent years however, UK membership of the European Union has restricted the previously unfettered

power of Parliament. There is an obligation, imposed by the Treaty of Rome, to bring UK law into line

with the Treaty itself and with directives. Regulations, having the force of law in every member state,

may be made under provisions of the Treaty of Rome.

PER 1 requires you to monitor compliance with relevant legislation, standards and regulations and raise

any concerns with the appropriate person. Therefore you should maintain your awareness of any

legislation identified in the Study Text which affects your role.

2.1 Parliamentary sovereignty

Parliamentary sovereignty gives rise to a number of consequences. Parliament may

 Repeal earlier statutes

 Overrule or modify case law developed in the courts

 Make new law on subjects which have not been regulated by law before

In practice, Parliament usually follows certain conventions which limit its freedom.

 No Parliament can legislate so as to prevent a future Parliament changing the law.

 Judges have to interpret statute law and they may find a meaning in it which those who promoted

the statute did not intend.

 The validity of an Act of Parliament cannot be questioned. However, judges may declare an Act to

be 'incompatible' with the European Convention on Human Rights.

2.2 Types of legislation

In addition to making new law and altering existing law, Parliament may make the law clearer by passing a

codifying statute putting case law on a statutory basis (such as the Sale of Goods Act 1979). It may also

pass consolidating statutes that incorporate an original statute and its successive amendments into a

single piece of legislation (such as the Employment Rights Act 1996 or the Companies Act 2006).

FAST FORWARD