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Tuesday, November 18, 2014

Common Law Creatures Roaming in Civil Law Countries

When I was visiting at Oxford recently, one thing that struck me was the dramatic interest in the trust in Europe and how many European scholars were studying and writing on trusts.  This interest was catalyzed by the EU Succession Regulation, which goes into effect in August of 2015, making it easier for Europeans to plan across borders their property transfers at death.  Under the EU regulation, there must be mutual recognition of legal decisions on succession throughout the EU.  Additionally, European citizens may now choose between their nationality and residence as the applicable law to their succession.  European member states will also need to develop laws that harmonize their laws with those of other member states. 

All of this squarely implicates the trust.  The problem, of course, is that trusts—used so frequently in England and the U.S.—are not fully recognized in civil law systems such as France.  In fact, many civil law systems have trouble recognizing this kind of split in property ownership and have concerns that trusts lead to tax fraud and money laundering.

My forthcoming article, co-written with a French notaire, looks at this problem. We note that the French civil code lacked any form of a trust until 2007, which saw the introduction of a trust-like instrument called the fiducie.  Since 2007, France has expanded its code relating to the fiducie and eliminated many restrictions on its operation.  However, even with this expansion, the fiducie still may be lacking under the European Regulation on Succession. We conclude that the notaire (a highly specialized lawyer) can help develop and create the fiducie that harmonizes with common law trusts in order to avoid litigation. 

Who knew we’d spot a common law creature—or close to it—in a civil law country?    

Posted by Margaret Ryznar on November 18, 2014 at 01:30 PM | Permalink


Thanks, I'll have to check that out.

Posted by: Margaret Ryznar | Nov 23, 2014 6:33:57 PM

The French supreme court has been quite innovative in the 15 years and has borrowed a number of common law creatures.

Two examples in international civil procedure are in personam injunctions and estoppel.

See respectively Muir Watt, injunctive relief in the french courts: a case of legal borrowing, (2003) 62 Cambridge LJ 573, and Cuniberti, Enhancing Judicial Reputation Through Legal Transplants - Estoppel Travels to France, 60 Am J Comp L, 383 (2012) (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1837576).

Posted by: Gilles Cuniberti | Nov 22, 2014 1:37:41 PM

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