Chapter 4
Forming Law
Introduction
Making Statute Law
Making Common Law
Interpreting Statute Law
Interpreting Common Law
Introduction
Forming law consists of two similar and related processes -
making law and
interpreting law.
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Statute law is made by a legislature, such as a congress or
parliament, while common law is made by courts. Courts also interpret law,
both common law and statute law.
Making Statute Law
Governments have two broad choices with regard to regulating an activity.
They can regulate it, usually with legislation, but occasionally by means of
executive action. Alternatively, they can leave it unregulated. In this case, the
activity is a matter for individual citizens.
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Where, however, this activity
involves production and distribution of goods, it will be regulated by the
market. Market forces will determine economic questions about supply and
demand, and in the process determine at least in part some collateral non
economic questions as well, such as labour, social and environmental
conditions. Consequently, in economic matters, the choice for the state is
regulation by legislation, regulation by the market, or regulation by some
mixture of the two.
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Obviously by making law a government intervenes to change some feature of
society. Indeed statute law is potentially a means of bringing about vast social
change when a legislature so desires. Once made, a law is administered by the
executive arm of government. If the law consists of a civil or criminal cause of
action it may be invoked by action in the courts (or in a tribunal or before
some official) brought by a government, a corporation or an individual. If the
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See Bauman (1989).
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Merrill and McLaughlin (1986), Vladeck (1981)
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See generally Ruabon (1989), Sunstein (1993), Sunstein (1990), Stewart (1982-
83), Schott (1990), Samuelson (1964), Salter (1982), Roach and Trebilcock (1996),
Rogers (1988), Groom (1990), Kamesar (1997).
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