Common Law vs Civil Law Systems

Cite this article as:"Common Law vs Civil Law Systems," in The Business Professor, updated January 1, 2015, last accessed July 5, 2020,
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Common Law versus Civil Law System
What is Common Law and What is the Civil Law System?

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What are the “common law” and “civil law” systems?

Two legal systems exist within the United States, the common law system and the civil law system. Forty-nine of the fifty US States exclusively follow the common law system. Louisiana is the one US state that recognizes common law and civil law systems. Despite the dominance of the common law system within the United States, it is important to understand the civil law system – as many foreign legal systems are based in civil law.

  • Civil Law System – The civil law system is “code-based”. The law-making body seeks to address specific areas of law through statute or codified rules. When a case comes before a court, the judiciary is charged with interpreting the codified rules when applying those rules to the facts of the case. This process is similar to that of the common law system. The difference lies in the effect of the judiciary’s interpretation of the law. While the court’s decision may be influential in future cases, its reasoning and interpretation of the law have little legal effect outside of the respective case. The judicial interpretation does not constitute “precedent” that binds the court (or any subordinate courts) in future trials.
  • Common Law System – The common law system, in contrast, centers on the judicial interpretation of statutes. That is to say, courts interpret statutes to determine the intent of lawmakers in passing the law. This interpretation guides how the statute is to be applied in a given context. Appellate review of legal cases provides opportunity for the judiciary to write opinions explaining how the law should be applied. These opinions serve as precedent for the court and any subordinate courts within that jurisdiction. In Latin, this is known as “stare decisis” or “let the decision stand”. The court’s interpretation becomes the common law in that jurisdiction. In this way, the court develops a body of common law that applies alongside the statute.

Discussion: What do think are some of the advantages of the civil law system? What about the common law system? Try to identify some countries follow a common law system similar to that of the United States? Try to identify some countries that follow a civil law system similar to that of Louisiana.

Discussion Input

  • One may expect that the civil law system binds the judges in the sense that it doesn’t give them the freedom to evolve the law. On the contrary, the Civil Law System places its trust on the judge to make the best decision possible. This system gives the judge the power to make the decision fairly based on his education and experience without being bound by past rulings. This system is also better suited for cases involving traditional and customary laws. The judges will provide a more learned insight to the case since he is able to apply the best of his knowledge for the specific case. One disadvantage of this system is that it’s static. Advantages of common law – Common law on the other hand allows for flexibility. It allows the judges to be able to respond to future cases, even those that they had not predicted. Common law is independent of political influence, ensures consistency in the legal systems and is clearer in instructions compared to civil law. Countries that practice Common law – Nigeria, New Zealand, Hong Kong, Canada, United States,(Except parts of Louisiana), Malaysia. Countries that practice Civil law –  Vietnam, Thailand, Madagascar, Mexico, Egypt, Iraq

Academic Research

Oumer, Kamil, Key Differences between the Civil and the Common Law Legal Systems (February 25, 2018). Available at SSRN:

Arruñada, Benito and Andonova, Veneta, Common Law and Civil Law as Pro-Market Adaptations (June 30, 2008). Washington University Journal of Law & Policy, 26, pp. 81-130, 2008. Available at SSRN: or

Sarkar, Prabirjit, Common Law vs. Civil Law: Which System Provides More Protection to Shareholders and Creditors and Promotes Financial Development (August 21, 2011). Available at SSRN: or

Posner, Richard A., Law and Economics in Common-Law, Civil-Law, and Developing Nations. Ratio Juris, Vol. 17, No. 1, pp. 66-79, March 2004. Available at SSRN:

Anidjar, Leon Yehuda and Katz, Ori and Zamir, Eyal, Enforced Performance in Common-Law Versus Civil Law Systems: An Empirical Study of a Legal Transformation (December 2, 2018). American Journal of Comparative Law, Forthcoming; Hebrew University of Jerusalem Legal Research Paper No. 19-02. Available at SSRN:

Chang, Yun-chien and Smith, Henry E., An Economic Analysis of Civil versus Common Law Property (February 17, 2012). 88 Notre Dame Law Review 1-55 (2012); Harvard Public Law Working Paper No. 12-19. Available at SSRN:

O’Connor, Vivienne, Common Law and Civil Law Traditions (February 17, 2012). Available at SSRN: or

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