Corporate Law Doctrine and the Legacy of American Legal Realism

Corporate Law Doctrine and the Legacy of American Legal Realism

In this contribution to a symposium on “Legal Realism and Legal Doctrine,” I examine the role that jurisprudence plays in corporate law doctrine. Through an examination of paired cases from the United States and United Kingdom, I offer a case study of the contrasting influence on corporate law judging of American Legal Realism versus traditional U.K. Doctrinalism.

Specialist judges in both systems, aided by specialist lawyers, clearly identify and understand the core policy issues involved in a dispute and arrive at sensible results. Adjusting for differences in background law and institutions, it seems likely that the disputes would ultimately be resolved in more or less the same way in each system. This is unsurprising in a field such as corporate law, where market and institutional pressures demand practical solutions to practical problems.

On the other hand, the differences in style are inescapable. While Delaware corporate law judges openly identify gaps and resolve them by reference to policy, U.K. judges employ a traditional historical/doctrinal approach, working through precedent and, in doing so, developing principles to resolve the case at bar. These differences in style, it seems to me, are a legacy of the impact of American Legal Realism on legal education in the United States, in contrast to the more traditional approach dominant in the United Kingdom. Explicit policy analysis is far more acceptable and natural in the Delaware approach than in the United Kingdom, and this difference in legal culture has effects on how lawyers present cases.

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