Showing papers in "Texas International Law Journal in 1999"

Legal Aid and Public Interest Law in China

Abstract: I. INTRODUCTION Reports from across China suggest that lawyers are increasingly coming to the assistance of people whom economic development has left behind. In Guangzhou, for example, legal aid lawyers convinced an appeals court to spare the life of an indigent woman convicted of being an accessory to murder.1 Similarly, in Shanghai, lawyers acting pro bono saved a ninety-two year-old woman from eviction from her apartment.2 In Wuhan, lawyers from a non-governmental legal aid center brought a successful suit on behalf of a woman illegally detained by the local public security bureau after she exposed corruption at her workplace.3 The recent emphasis on lawyers serving society is not new, but it arises against a new backdrop: an increased focus on the provision of legal services to China's poor and disadvantaged. Over the past four years, as China's legal profession has grown to become the third largest in the world,4 provincial and local justice bureaus have established a total of 180 legal aid centers or offices.5 In addition, at least three non-governmental legal aid providers are currently operating in China, local branches of the All-China Women's Federation have established legal aid clinics in at least three rural counties, and private Chinese law firms are increasingly willing to undertake pro bono or contingent-fee litigation on behalf of the disadvantaged. In many cities, legal aid programs are little more than a single official working out of the local justice bureau, but in some locales, legal aid centers employ full-time lawyers and handle thousands of inquiries and hundreds of cases annually. Legal aid programs in China also range in their focus: in Guangzhou, the government-run legal aid program focuses primarily on representing criminal defendants facing life in prison or death; in Beijing, the legal aid program at Peking University works exclusively to protect women's rights. Legal aid has also attracted the attention of many of those outside of China who are concerned with strengthening China's legal system. United States President Bill Clinton has cited it as a potential area for Amercian cooperation with China, and both Hillary Rodham Clinton and Secretary of State Madeleine Albright visited legal aid centers during the President's June 1998 visit to China.6 Other Western governments, non-governmental organizations, and philanthropic foundations have similarly shown a strong interest in China's legal aid programs.7 This article describes the evolution of legal aid and public interest law in China and examines its implications for the legal profession and the law in the context of four intertwined developments: first, China's efforts to establish a nationwide system of government-run legal aid centers; second, China's attempt to expand the availability and improve the quality of legal representation for indigent criminal defendants; third, China's bid to force the legal profession to serve poor clients via mandatory pro bono requirements for lawyers; fourth, the development of non-governmental legal aid centers and the expanding incentives for profit-oriented lawyers to take on pro bono cases or pursue public interest litigation. Although it is too early to declare that the evolution of legal aid will reshape the function of law or the status of individual rights in China, this article argues that the evolution illustrates the choices facing China as it continues to reform its legal system and legal profession. China's development of legal aid also demonstrates the degree to which legal development in China is progressing without any single dominant rationale or policy goal. A number of questions permeate this analysis. What considerations have motivated China's recent commitment to legal aid, and what goals is legal aid designed to further? What is the likelihood that legal aid will actually become a significant component of the Chinese legal system, and what would be the consequences of such a development? …

Harmonization of Products Liability Law in the European Community

Abstract: I. INTRODUCTION A. The Need for Harmonization An essential element of the common market envisioned by the Treaty Establishing the European Community (EC Treaty)' is undistorted competition. The legal differences between the laws of the European Community's (EC's) Member States impose different economic burdens on their competing industries. For example, prior to harmonization of product liability laws in Member States, if the economic loss caused by a defective product was borne by the producer, as was the case in France, the industry was in a much less favorable economic situation than in Italy where the damage caused had to be borne by the unfortunate victim. According to the fault liability principle in Italy, the victim could not secure compensation. This was true not only if actual damages paid were considered, but also in the context in which total insurance premiums were taken into account. In Germany, the total amount of insurance premiums paid by the pharmaceutical industry after the introduction of the Pharmaceutical Act2 in 1976 was 55 million DM at the value prevailing at that time. By contrast, the Italian industry had nothing to pay. Unequal economic burdens lead to distortions of competition. Furthermore, variations in laws reflect major differences in approaches to consumer protection. Therefore a product user enjoys a much higher degree of protection if, in the event of damage, he can successfully bring an action against the producer, as was possible in France, but again he could not bring such an action in Italy. One of the aims of the EC is consumer protection without discrimination in all Member States. Consequently, the EC should have uniform rules in such an important area as product liability. It must be borne in mind that the EC is much more than merely one international organization among others, such as the Council of Europe, European Free Trade Association (EFTA), or the United Nations. The EC has the power and authority to create directly applicable law under a legal procedure which is similar to that of sovereign states. The EC Treaty created the European Court of Justice with the power and authority to take and enforce decisions on legal disputes. Harmonized law promotes the economic and political integration of its Member States, an example of which is the Product Liability Directive.3 B. Legal Bases: Articles 3(h), 100, and 100a of the EC Treaty One of the tasks of the EC as defined in Article 3(h) of the EC Treaty is the "approximation of the laws of the Member States to the extent required for the proper functioning of the common market." This provision has three components. First, the EC has competence only to approximate Member States' laws, not to unify them. Unification of laws aims to ensure identical legal provisions, whereas approximation of laws leaves the identity of the national law unaffected. Second, the phrase "to the extent required" does not allow the approximation of all national laws, even where such approximation may lie in the general interest. The task is limited to legal areas which are of relevance to the basis of the EC, namely the common market, and more precisely to the proper functioning of the EC. The common market, the third component of this provision, is defined by four freedomsfree circulation of goods, persons, services and capital-and the preservation of a system of undistorted competition.4 As a result of recent developments in the Treaty of Maastricht amendments, this definition may, in a larger context, also cover the need to protect consumers' interests and the environment. Again, the EC has the power and authority to introduce measures necessary for the approximation of legal areas only if the legal provisions are relevant to the establishment and functioning of the common market and only if the respective legal provisions have a direct impact on the common market. Article 3(h) defines the scope of harmonization measures. …

Using International Law to Prevent Environmental Harm from Increased Use of Desalination

Abstract: I. INTRODUCTION If we ever competitively, at a cheap rate, get fresh water from salt water, it would be in the long range interests of humanity [and] would really dwarf any other scientific accomplishments. -John F Kennedy Nearly all (97.3%) of the world's water is in the oceans.1 Because of its salinity, this water is unsuitable for most economic and human life activities other than navigation, aquaculture, cooling, and recreation. Drinking, bathing, most industrial uses, and especially agriculture require water of considerably lower salinity. Of the small amount of water not contained in the oceans, the majority (77.2%) is ice.2 Most of the remainder is groundwater, much of which is fossil, saline, too deep to retrieve, or of otherwise limited usefulness or renewability.3 Demands on freshwater resources are constantly increasing, as a result of increases both in population and in per capita water demands. Both trends seem likely to continue for the foreseeable future. Currently, the United States consumes an average of 159 gallons of fresh water per person per day4 and may soon exceed 260 gallons per person per day.5 In contrast, half of the world's population consumes less than twenty-five gallons per person per day.6 The residents of India and Pakistan, for example, consume only nine gallons per person per day.7 As living standards in developing countries improve, the water demands of persons in those countries will approach levels in the developed world, resulting in a possible ten-fold increase in water consumption, even in the absence of a population increase.8 In much of the world, existing surface water and usable groundwater supplies are already fully exploited. Twenty-six countries are experiencing water scarcity.9 Twenty of these countries are in Africa and the Middle East; three of the others are small island states.10 The other three (Belgium, Hungary, and the Netherlands) are industrialized states with high population densities. Even in water-rich countries, regional water scarcity is common. San Diego, California, for example, imports over ninety percent of its water.11 By the year 2025, as much as one-third of the earth's population may live in water-scarce countries.12 A variety of means exists to increase available supplies of usable fresh water. Improved water conservation techniques, water reclamation, wastewater purification, development of drought-tolerant and salinity-tolerant crops, and transportation of water from unpopulated regions all offer means to alleviate water scarcity problems.13 Other technological fixes-increasing rainfall or transporting ice from the polar ice caps-- currently seem a bit more far-fetched. In any event, each of these solutions is not without its attendant environmental problems. Ultimately, even with full utilization of existing freshwater resources, demand will exceed supply. At that point, if not long before,14 attention will inevitably focus on the 97.3% of the earth's water contained in the oceans. In most areas of the world, desalination15 is currently more expensive than other means of obtaining fresh water.16 Ultimately this will change, either because improvements in desalination technology17 will bring down the cost or because other factors, such as rising population and diminishing supplies, will raise the costs of other sources of water. Already, the world's 11,066 desalination plants have a production capacity of 7.4 billion cubic meters of water per year, or about 0.2% of total worldwide water use.18 The next century will almost certainly see a dramatic increase in the desalination of seawater, brackish surface water, and saline groundwater. This increase in desalination will give rise to a variety of environmental problems; very few countries have adequate legal structures in place to limit the harm caused by desalination. This article will address existing desalination technologies and the problems they present, as well as existing law regarding desalination. …

Group Litigation of Consumer Claims: Lessons from the U.S. Experience

Abstract: I. INTRODUCTION A central problem bedevils the enforcement of consumer protection. In mass society, individual consumers have an inherent inability to protect themselves effectively from the improper or fraudulent conduct of a distant and usually more financially powerful seller. As markets expand to international dimensions and as the cost of distribution falls, most evidently through Internet marketing, the physical distance and lack of direct connection between buyer and seller increases. The divide, both geographic and cultural, suggests an absence of controls to prevent exploitative conduct by remote and fairly anonymous sellers. As the distance increases, the dissuading power of social norms1 and the reputational consequences of commercial misconduct2 lose whatever effectiveness they might have had in more close-knit communities. The inability of internal market mechanisms to provide an effective prohibition on seller misconduct necessitates some other enforcement mechanism, and the candidate of first choice is generally government regulation.3 At the same time that expanding commercial markets prompt a need for regulation, however, there comes an increasing realization that regulation itself imposes costs that can be detrimental to consumer welfare.4 Furthermore, government regulation is limited in its capacity to provide effective ex ante checks on improper commercial market activity. Examples of command and control regulation of product development, such as the approval process for new medications under the Food and Drug Administration,5 reveal the delays and costs associated with direct governmental oversight. While such restraints may be a necessary price in regulating products directly affecting health, few would encourage such a model as the standard for the development of all consumer products. Effective legal oversight of consumer welfare requires mechanisms of ex post review that can effectively punish misconduct and thereby deter opportunistic fraud. The question therefore becomes one of identifying the mechanisms of ex post review that are likely to provide such oversight. The most obvious forms are also the best known-formal oversight by government regulators and nongovernmental organizations (NGOs). I want to suggest in this essay, however, that both governmental and NGO oversight are inherently limited and that their effectiveness may be complemented by enlisting capable private enforcement. Effective private enforcement in turn requires mechanisms to aggregate the small and diffuse claims of consumers, lest the small stake of each individual present an insurmountable hurdle for engaging private actors. Unfortunately, the same requirement of coordination that state entities are unable to meet also decisively hampers the capacity for private enforcement of consumer claims by the affected consumers themselves. In order for consumers to advocate on their own behalf, there must be a mechanism to coordinate diverse consumers, to compel their cooperation so as to be able to pool resources against financially superior opponents, and to exact the costs of participation from all the participants in the enforcement effort so as to prevent "free riding"-the refusal of some to pay on the assumption that someone else will carry the ball. The most effective mechanism for aggregating consumer claims is the class action. This is a point that has clear authority in U.S. law, as emphasized by the Supreme Court: The aggregation of individual claims in the context of a classwide suit is an evolutionary response to the existence of injuries unremedied by the regulatory action of government. Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device.6 What follows is an elaboration on why private enforcement is a necessary complement to public oversight and on the prerequisites for effective private enforcement actions. …

Some Remarks on the Method of Civil Law

Abstract: I. INTRODUCTION Professor Cappalli, the Klein Chair in Law and Government at the Temple University School of Law, claims in a recently published article1 that the common law has developed a method of applying the law that is significantly superior to the civil law method. This, in his eyes, has to do with the fact that civilians are trained in deductive methodology rather than in case-to-case reasoning.2 They understand and apply law as a logical operation.3 In Cappalli's view, "the legislator is considered the exclusive law-giver in the civil law tradition.... The judicial task is to locate the correct rule and apply it syllogistically to the particular facts which each case presents."4 Cappalli also contends that "[j]udicial precedents carry no weight because no creativity is involved."5 The civil law tradition does not provide its judges and lawyers with the tools to fill the spaces in the code. "It denies them power to reformulate the texts of codes in narrower terms, that is, to move the rules toward the facts."6 In Cappalli's experience, "purposive application of law is uncommon in the opinions of civil law judges."7 Cappalli deplores the poor civil lawyer who, "[d]eprived of the many interpretative tools held by the case lawyer," will end up "massaging the facts,"6 i.e., moving them toward the rule.8 This leads him to the conclusion that "when law is applied to case fact, the civil law is inherently much more uncertain than the common law."9 Cappalli is of the opinion that fluency in one foreign language "and a budding interest in another" gave him "immediate access to legal works in other tongues."10 Based on this, he comes to a devastating conclusion, and this at the very beginning of his article: The legal instruments and operations of the civil law often seem superficial, naive, and unworkable. Reading within the grammatically monstrous syntax and style of civil law writers, particularly the Italians, is taxing and frustrating. I often think that 2000 years should have produced greater sophistication in law and the art of communicating law.11 Cappalli contrasts his findings with the method of common law, which, in his eyes, has almost only advantages. Unlike civil law, "[t]he common law process of law creation never ends because each case precedent adds to the corpus of case law, whether minutely or mightily.12 This article both responds to Professor Cappalli's approach and sets out a broader framework of comparison between the civil and common law methods. It deals first with the alleged maxim of completeness of the civil codes and with the so-called mechanical theory of jurisprudence. It then explains the civilian method of interpretation and the concept of general clauses. Special emphasis is placed on the findings of modern hermeneutics. The three final sections concern the influence of the common law on the civil law method, the influence of the civil law on the common law method, and my conclusions. To begin, however, I want to make a few remarks on the notion of civil law. II. NOTION OF CIVIL LAW In U.S. literature, the notion of civil law describes the whole body of private law within the countries of the European continent as well as the laws of Latin America. The characteristic common feature of these laws is that they are contained in so-called civil codes. Civil codes date back to the eighteenth and nineteenth centuries. The civil codes have been described as a "systematic, authoritative, and guiding statute of broad coverage, breathing the spirit of reform and marking a new start in the legal life of an entire nation."13 One should notice that this notion of civil law is not of European origin. Rather, Europeans tend (more or less) to carefully distinguish between the codes of single countries or to speak of legal families, such as the Romanic, the Germanic, the Nordic or, indeed, the Anglo-Saxon family. The common law, therefore, is just one of these legal communities. …

Products Liability in the United Kingdom: The Myths of Reform

Abstract: I. INTRODUCTION Comparative products liability is a dangerous business. For example, it may appear to U.S. eyes that the special U.S.-developed rule in the field1 was simply exported first to Europe and then elsewhere but this would be wholly misleading. Certainly when it comes to the European Community,2 the story of the modern creation of a special cause of action for those injured by products is fundamentally different from the corresponding story in the United States.3 For example, whereas in the United States the special product liability rule was created by judges, the special European rule4 was created by the technique of a Directive5 from the Council of the European Communities to the legislatures of the Member States, requiring them to implement its provisions via domestic legislation. Similarly, whereas the history of the U.S. rule reveals no single episode galvanising concern about civil remedies available to consumers, the Thalidomide disaster6 in Europe was clearly the catalyst for the reform processes that culminated in the 1985 Council Directive "on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products."7 It provides a telling benchmark by which to evaluate the impact of the latter. The doctrinal context is also different in fundamental ways. Let me give three examples. First, judicial loyalty to precedent is much stronger in the United Kingdom than in the United States.8 Second, in the United Kingdom there is only one final court of appeal for matters concerning civil liability-the House of Lords-in striking contrast to the situation in the United States. Third, and of importance specifically in the products liability field, in the United Kingdom an injured worker's receipt of state benefits in relation to his work injury does not preempt a civil claim against anyone, not even his employer or any third party involved in the manufacture or supply of a product implicated in the causation of the injury.9 Even more broadly, the socio-legal context in which the European rule operates would be unrecognisable to the average practitioner in the United States. In the United Kingdom, for example, the loser pays not only his own but the winner's costs;10 neither punitive damages nor juries (save in Scotland) are available for products liability claims; and the operation of the National Health Service has in the past operated to relieve most tortfeasors from the costs of their victims' medical treatment.11 Moreover, the "European product liability rule" is in fact not one rule at all; despite the vaunted claim that the Directive was aimed at the approximation of product regimes across Member States, in a real sense, it has merely added onto existing regimes a further level of disparate rules varying, for example, according to which options in the Directive were implemented and what local rules exist in relation to non-pecuniary loss.12 Yet the U.S. products liability experience-or more correctly how that experience was perceived in Europe-did have real influence on Europe's moves toward its own rule in the Directive. During the early to mid-seventies, when European governments were beginning to lock themselves into the rhetoric of this "necessary" law reform, the popular perception of the U.S. rule encouraged the view that a reform focused on products was workable, acceptable, and broadly beneficial.13 Even today, when Europeans have a more sophisticated understanding of the U.S. experience and its limited practical relevance to the working of European liability regimes, the U.S. experience nevertheless exercises a powerful hand on products liability debate in Europe. The most important example is perhaps the way the indistinct U.S. usage of the term "strict liability" continues to bedevil discussion of this field and the law of obligations generally. What this means is that while it is unhelpful, even meaningless, simply to lay out side-by-side, say, the U. …

International Trade and Development: Exploring the Impact of Fair Trade Organizations in the Global Economy and the Law

Abstract: I INTRODUCTION What difference does fifty dollars make in the life of the average American? A new pair of jeans? Dinner and a movie for two? A monthly telephone bill? For most Americans, the gain or loss of fifty dollars is a relatively insignificant event But what if it made the difference between prosperity or mere survival, life or death? For millions of people around the world, access to even the slightest amount of capital is all they need to rise out of utter destitution into the world of self-sufficiency and economic stability Such was the case with Maximina Garcia Lapa, a Peruvian woman who was forced to flee her native village by Shining Path (Sendero Luminoso) guerillas in the 1980s1 Maximina and her family fled from rural Peru into the city of Ayacucho, where they encountered a scarcity of jobs, inadequate and overcrowded housing, and poor sanitary conditions2 Since finding work in these circumstances was difficult, if not impossible, Maximina turned to the resource she already possessed-her knowledge of plants-to support herself and her family3 With a fifty dollar loan from the Foundation for International Community Assistance (FINCH), Maximina was able to purchase the materials and equipment necessary to begin a small business producing and selling natural dyes4 After years of hard work, her business has grown large enough to employ six family members It has also provided Maximina with the funds to build her own house with water and electricity and to purchase two hectares of farmland that supply the business with plant material5 Maximina's case illustrates the enormous beneficial impact that even the tiniest amounts of capital, or microloans, can make in the life of a developing world entrepreneur Empowering people like Maximina to achieve economic self-sufficiency is at the heart of the "fair trade" or "alternative trade" movement, which promotes socially responsible trade and development with producers in developing countries6 The fair trade movement's goal is to change the way in which international trade is conducted between developed world consumers and developing world producers by making the welfare of the producer of primary importance7 Studies indicate that workers in the informal sector8 are most in need of development assistance;9 accordingly, the movement focuses on producers of handicrafts10 and agricultural products from this sector Despite the focus on small producers, however, fair trade proponents are also active in efforts to lobby large corporations and governments to adopt policies addressing the ethical treatment of workers, human rights, and other social and legal concerns11 Additionally, because the fair trade movement is concerned with international trade as it affects artisanal, communal production, and the informal sector, the term "fair trade" as used by the movement is distinguishable from trade protectionism, where one country seeks to trade on the same "fair" terms as another12 This "fair trade" strategy calls for eliminating practices that exclude the producer from most of the financial benefit of the trade and promoting economic self-sufficiency at the producer level13 In addition to their lobbying and advocacy efforts, fair trade organizations (FTOs) usually work directly with the producer to develop, finance, distribute, market, and sell products14 As "[t]rade represents 80 per cent of income to the developing world," if successful, the movement will have a significant impact on the condition of producers15 Fair trade publications are full of stories of people like Maximina who have overcome hardship through trade For them, fair trade presents an opportunity to rebuild their lives Thus, inherent in the fair trade movement is a concern for both the economic welfare and human rights of producers Although many consumers in developed nations are unaware of the existence of these organizations, there are now hundreds of fair trade organizations throughout the world, and the market for "fairly-traded" products is increasing yearly …

What Europe, Japan and Other Countries Can Learn from the New American Restatement of Products Liability

Abstract: I. INTRODUCTION One objective of this Symposium is to compare the Restatement of Torts in the United States with the products liability law of other countries. Toward that end, this article briefly describes the new Restatement (Third) of Torts (the new Restatement)1 and the processes that led to its final approval and promulgation. Following this descriptive portion, the article advances the thesis that the new Restatement has much to offer by way of guidance to judges, legislators, and other policy-makers internationally. More specifically, this article argues that recent substantive law developments in Europe, Japan, and elsewhere, taken at face value, suggest that the lessons learned the hard way in the United States have in certain important aspects been lost on the international legal community. The products liability law being developed outside the United States appears too simplistic to these American observers to perform adequately in the long run. Significant adjustments will probably be required, and now is not too early to begin to anticipate what those adjustments will be. Academic reactions to these substantive law developments in Europe and Japan have missed the point made in this Article in two important ways. First, most commentators have concluded that Europe and Japan have moved quite close to the American position by adopting strict liability in tort; in reality, adoption of strict liability moves these jurisdictions further from the American position rather than closer.3 Second, non-American commentators have argued that differences in civil litigation procedures tend to dwarf differences in substance, thus implying that the substantive differences do not matter. The American civil litigation system, with its reliance on percentage contingent fees, extensive pretrial discovery, quixotic lay juries, and generous measures of recovery, is believed to explain the differences between the American products liability experience and any likely to occur in other countries. A legal system in which these uniquely American institutions are conspicuous by their absence, by clear implication, can get by quite nicely with a much simpler version of the underlying substantive text.4 This article argues that the foregoing reasoning is demonstrably flawed and may very well lead to unfortunate consequences. The word "unfortunate" does not imply anything approaching severe economic dislocation. As long as the traditional procedural constraints in other countries remain intact, products liability should not threaten the growth of industry or lead to economic recession. Thus, from a purely practical perspective, the majority of international commentators have probably gotten it right. But inadequate substantive standards in the form of overly simplistic rules of decision will present judges and lawyers with conceptual difficulties in trying to respond to products liability claims rationally, consistently, and fairly. Ultimately, a somewhat more sophisticated program of substantive law will be required to achieve these goals. When that time arrives, the new Restatement can play a helpful role in making the necessary adjustments. Indeed, international scholars are well advised to anticipate that adjustments will be necessary, and to consider making them sooner rather than later. II. THE RESTATEMENT (THIRD) OF TORTS: PRODUCTS LIABILITY A. American Products Liability Law in the Period Preceding the New Restatement: 1960-Present Through the early 1960s, American products liability law struggled with three major issues: whether privity of contract between plaintiff and defendant should be required for tort remedies to be available;5 whether contract-based disclaimers of tort liability should be given effect;6 and whether strict liability should replace negligence as the predominant doctrinal basis of liability in tort.7 These struggles culminated in 1965 with the inclusion by the American Law Institute (ALI) of a landmark provision in the Restatement (Second) of Torts: Section 402A (the Restatement (Second)). …

The Canadian Law of Products Liability

Abstract: I. INTRODUCTION The current law of products liability in the common law provinces of Canada falls into two main legal categories: negligence and warranty. Although liability is not generally stated to be "strict," both branches of the law contain important elements of strict liability. Under the law of negligence there is a theoretical requirement for the plaintiff to establish the defendant's fault. In practice, however, there is an inference of negligence when the plaintiff proves that the product left a manufacturer's hands in a defective state: "Either the manufacturer's system was at fault or, if the system was sound, then an individual employee must have been negligent."1 Nevertheless, this position falls short of strict liability in a number of respects. The most important of these are, first, the case where the state of knowledge at the time of manufacture did not enable a defect to be identified; this is sometimes called a "development risk" or a "state of the art" defense. The second case where the plaintiff will fail under the current law, despite proof of a defect, is when the defect is due to component parts or materials or a design obtained by the manufacturer from a reputable supplier. A third point is that the inference of negligence only operates against a manufacturer; wholesalers and other business suppliers are rarely found liable for negligence under the current law, though they would be liable under a law imposing strict liability on all business suppliers of defective products. The other main branch of current Canadian law, warranty, undoubtedly does impose strict liability. It is well established that the plaintiff is not required to prove fault in an action for breach of warranty under the Sale of Goods Act.2 But strict liability is hedged about by anomalous restrictions: because the basis of the liability is contractual, only the buyer can recover, and only the seller is liable. So the buyer of a bottle of soda water who loses an eye because of a defect in the cap can sue the retail seller,3 but the buyer's spouse, child, or guest has no action.4 Also, no one can sue the manufacturer or other business suppliers for breach of warranty, making the person in the distributive chain who is usually the least responsible for the defect, the retailer, the most strictly liable. These two restrictions on the scope of warranty liability were usually called by American commentators before the adoption of Section 402A of the Second Restatement,5 "horizontal" and "vertical" privity. These two types of privity can be visualized in a diagram in which the manufacturer is shown at the top, with a vertical line extending down to wholesalers and other business distributors and then to the retail seller, from where a horizontal line extends to the buyer and then to other users or consumers of the product.6 In two of the common law provinces, Saskatchewan and New Brunswick, the statutory sales warranties have been extended by legislation.7 This has an effect very close to a general principle of strict liability, but falls short of it because these provisions apply only to consumer products as defined and, in Saskatchewan, apply only against the retailer and the manufacturer as defined.8 Quebec requires separate attention; it is a civil law jurisdiction that adopted a new civil code in 1992.9 The code incorporates a noncontractual principle of strict products liability: 1468. The manufacturer of a movable property is liable to [make] reparation for injury caused to a third person by reason of a safety defect in the thing, even if it is incorporated with or placed in an immovable for the service or operation of the immovable. The same rule applies to a person who distributes the thing under his name or as his own and to any supplier of the thing, whether a wholesaler or a retailer and whether or not he imported the thing.10 1469. A thing has a safety defect where, having regard to all the circumstances, it does not afford the safety which a person is normally entitled to expect, particularly by reason of a defect in the design or manufacture of the thing, poor preservation or presentation of the thing, or the lack of sufficient indications as to the risks and dangers it involves or as to safety precautions. …

Export Control Policies and National Security: Protecting U.S. Interests in the New Millennium

Abstract: I. INTRODUCTION The uproar over the Clinton Administration's recent decision to export satellite technology to China highlights the national security interests implicated by U.S. export control policy. Amid the partisan bickering over whether the export was made in return for campaign contributions,1 it is easy to overlook the threat to national security that any technology transfer poses. Unfortunately, the sale of military technology to a potentially hostile state is not a new occurrence. The Persian Gulf War clearly highlighted the dangers posed by countries that gain access to weapons of mass destruction and the strategic technology needed to create those weapons. Hundreds of companies sold Iraq highly sensitive equipment and technology that were used in nuclear facilities.2 As the United States is increasingly drawn into civil wars and regional conflicts, such as Haiti, Somalia, Bosnia, and Kosovo, policymakers should be increasingly concerned about the proliferation of lethal weapons that may be used either against American combat forces abroad or U.S. citizens at home.3 Controlling the export of such weapons and the technology to make them has been the cornerstone of U.S. policy since the conclusion of World War II. In the past, most of the United States' attention was focused on preventing the acquisition of technology by the former Soviet Union and its allies.4 Although these controls were often costly from an economic standpoint, most experts agree that they did impede the development of Soviet defenses.5 With the end of the Cold War, however, the policy rationale behind export controls was drawn into question, with many experts contending that such controls had become irrelevant without current justification. Many argued that the controls should be eliminated to increase trade with Russia, China, Eastern Europe, the Middle East, and other emerging economic powers around the world.6 Business leaders also seized upon the end of the Cold War to openly criticize the way the United States had handled export controls in the past and to describe the current regime as "a national embarrassment."7 Against these ongoing developments, this article will explore some of the deficiencies inherent in the current U.S. export control regime, particularly in the areas of shared licensing and enforcement responsibility. That structure has been at the root of the problem with U.S. export controls-a failure to recognize that national security interests will always lose when put in direct competition with job growth and trade deficits. Finally, the authors argue that the current export control scheme should be replaced by a single governmental body that has the preservation of national security as its primary concern. II. HISTORICAL DEVELOPMENT OF U.S. EXPORT CONTROLS Before addressing some of the current problems with export controls, a short chronology of export controls in the United States and other Western countries is necessary.8 Export controls were originally limited to wartime with the enactment of the Trading With the Enemy Act of 1917.9 Fueled by the Cold War and increased tensions with the Soviet Union, export controls were expanded during and after World War II.10 Congress enacted the Mutual Defense Assistance Control Act of 1951, commonly known as the "Battle Act,"11 to embargo the export of arms and other strategic items to nations threatening the national security of the United States.12 The Mutual Security Act of 1954 also authorized controls on military hardware and technology that could affect world peace or the security and foreign policy interests of the United States.13 The Arms Export Control Act (AECA)14 later became the umbrella statute under which the commercial export of exclusively military items and related technical data is controlled. The Department of State administers the licensing of these items under this statute.15 Congress continued to augment export controls in peacetime by developing an extensive export control regime to govern the flow of domestic exports under the Export Control Act of 1949. …

German Approaches to Products Liability

Abstract: I. INTRODUCTION German products liability law relies on three concepts: traditional contractual liability, traditional tort liability, and strict liability based on specific statutes, such as the Products Liability Act of 1990,1 which implements the European Products Liability Directive,2 and the Pharmaceutical Products Act of 1976, amended last time by the Pharmaceutical Products Act of February 25, 1998.3 These three competing concepts supplement each other in a complex way. Rather than replace German autonomous4 products liability law, the new Products Liability Act adds a strict liability claim which is not available under the traditional German Civil Code doctrine.5 In general, a German plaintiff will bring his or her products liability claim under theories of both negligence and strict liability. As the buyer of a product, he might also seek to hold the seller liable on a contractual basis for any injuries caused by the product.6 This article, therefore, describes a variety of alternative claims that a plaintiff may file under German law. II. PRODUCTS LIABILITY BASED ON CONTRACT In German contract law, compensation for damages resulting from a defective product is granted under narrowly defined conditions. A buyer may only claim damages if the seller fraudulently concealed a defect, or if the good did not conform to a statement regarding its quality-ie., a breach of an express or implied warranty. Codified German contract law, however, does not provide sufficient protection for the consumer for the following reasons: fraudulently concealed defects are difficult to prove;8 not all product information can be considered a warranty;9 the claim for damages based on a breach of warranty is subject to an extremely short statute of limitations of six or twelve months after delivery of the good;10 only the seller, and not the manufacturer, can be held liable;11 and only the buyer may recover damages.12 German courts have filled some, but not all, of the gaps in contract law. In some instances, the courts have construed an independent consultancy agreement to avoid the statute of limitations under sales contract law.13 Further, courts have developed a new concept called the Positive Vertragsverletzung (positive violation of a contractual duty).14 This judge-made concept allows a buyer to recover damages not covered by Section 463 of the Civil Code-especially those resulting from personal injury and property loss (excluding the loss of the product itself).15 Furthermore, the courts have extended the contractual protection to relatives and employees of the buyer who foreseeably come in contact with the product. 16 However, German judges, by denying claims against the manufacturer under contract law, have refused to go as far as their colleagues in France and Austria. Thus, the German system of contractual products liability has remained incomplete, particularly because it does not protect all product users, especially innocent bystanders. Instead, the Federal Supreme Court in its 1968 landmark decision, the Fowl Pest Case, decided to enhance the consumer's protection from defective products under the principles of traditional tort law.17 III. GERMAN CIVIL CODE TORT LIABILITY UNDER THE NEGLIGENCE THEORY A. Liability Under Section 823, Paragraph 1 of the Civil Code 1. Introductory Remarks Section 823, Paragraph 1, of the Civil Code18 provides a catch-all provision for tort claims that is the leading tort provision in and outside of the products liability field. A person who willfully, or negligently, and unlawfully injures the life, person, health, freedom, property, or other right of another is liable to compensate him for any damages arising therefrom.19 German products liability law developed under this rule before the Products Liability Act was promulgated. Because the structure of Section 823, Paragraph I of the Civil Code was not designed to cope with the specific difficulties which arise in the area of products liability, the German courts had the challenging task of applying the provision to various product liability issues. …

The Cyberspace Separatism Fallacy

Abstract: Future Codes: Essays in Advanced Computer Technology and the Law. By Curtis E.A. Karnow. Boston: Artech House, 1997. I. THE SEPARATISM FALLACY Cyberspace is a hot place these days. This is true, of course, not literally-one does not feel heat when interacting with others in computer-mediated space-but instead figuratively, as virtual worlds are an increasingly popular destination. From much of the talk that has accompanied the legal wrangling over the emergence of cyberspace, though, one might be forgiven for thinking that cyberspace is a place with physical existence, where actual heat can be experienced. Many early adopters of the technology that enables cyberspace (or, if you prefer Neal Stephenson to William Gibson, "the metaverse")1 are devoted to a vision of a place with a separate existence from our mundane, everyday, physical world. They posit that because technology now allows human interaction on substantially different terms than before, the laws and rules that apply to human interaction in real space magically dissolve, or at least need to be radically reformulated.2 The question of whether cyberspace is a different place where rules developed in the physical world do not (or should not) apply has had little practical import thus far. Only those who have moved significant segments of their lives online have cared deeply about the right answer. But as the networked computer assumes a more central place in our everyday lives, the question whether-or, more precisely, how--cyberspace is different from our everyday world becomes ever more salient. As interaction through computermediated space becomes the norm instead of the exception, writing and discussion about it should try to root out key fallacies associated with earlier views. Interaction in cyberspace is critically and meaningfully different from interaction in "realspace," but those differences do not support the facile claim that cyberspace should be viewed as a separate jurisdiction, freed through technology from existing legal principles. The ideas presented in Curtis Karnow's Future Codes: Essays in Advanced Computer Technology and the Law are meaningful and important, but they teeter on the edge of this problematic claim-what we might call the "separatism fallacy." The book also suffers from structural problems associated with turning a collection of essays into a book. In focusing on these problems, I do not mean to give short shrift to the intellectually interesting discussions that the individual essays provide. My critique is deliberately at the level of basic assumptions, because I think that is the only area where Karnow and I disagree. His presentations on particular topics are broad, and broad-minded, and offer some useful intellectual challenges. The book touches on many topics-legal reform, community-based standards, multimedia, international technology rights, virtual reality, data morphing, copyright and other limitations on web linking, information loss, encryption, artificial intelligence, computer crimes, the First Amendment's application in cyberspace, and the internal structure of computers-in an intelligent and engaging way. But Karnow's central theme, "that there are inherent problems in using computers, problems that are a function of the entire computing environment, including the humans [sic] designers and users,"3 and his application of that theme to particular issues is useful only to the point that it stays away from the separatism fallacy. He correctly recognizes special questions that computer technology poses for the law, but falters when he begins to assert that the computing environment is in serious need of separate, special rules that are relatively disconnected from what has come before.4 II. COMMUNITY CONSENSUS, TECHNOLOGICAL CHANGE, AND TECHNOLOGY'S CHALLENGE TO LAW At the core of the essays in Future Codes are two claims that strike me as essentially correct. First is the idea that our legal system relies on community consensus around the rules that the law embodies. …

Succeeding in Seceding?: Internationalizing the QuEbec Seccession Reference under NAFTA

Abstract: It is proposed that Quebec become a sovereign country through the democratic process. (. . . ) An economic association with Canada would be maintained in order to preserve and further develop the free circulation of goods and services, of capital and of persons that is currently prevailing. To the same end, Quebec would continue to adhere to the North American Free Trade Agreement.1 I. INTRODUCTION On August 20, 1998, the Supreme Court of Canada handed down its decision on the question of whether Quebec can achieve independence from Canada through unilateral declaration. The seventy-eight page ruling is known as the Quebec Secession Reference (QSR).2 As many had predicted,3 the Supreme Court established guidelines under which the government of Quebec may legitimately pursue secession from Canada.4 In the wake of this decision, the Canadian government's future dealings with a separate Quebec, including for purposes of state recognition and economic trade, will be based primarily on whether the government of Quebec complies with the Supreme Court's secession guidelines. Although the Canadian government hoped that the case would dissuade soft-nationalist voters in Quebec from supporting independence,5 the QSR may have only aggravated the situation.6 Separatist politicians have begun to "appropriate" the decision by emphasizing that the Court ultimately recognized the possibility of separation, even though it rejected the validity of unilateral secession under Canadian and international law.7 Separatist leaders have boasted that the Quebec government, unlike the federal government, does not officially recognize the judgment; consequently, it is not bound to its dictates.8 Therefore, there are no guarantees that Quebec's actions with respect to future referendum campaigns will be consistent with the Supreme Court's prescription. This note proposes a new prong to the Canadian government's strategy of ensuring compliance with the QSR. One crucial issue that the Supreme Court did not address is whether, in order to join the North American Free Trade Agreement (NAFTA)9 as a separate country, Quebec can succeed-i.e., automatically join NAFTA-or whether it must accede-i.e., petition to join NAFTA as a new country.10 Practically speaking, as long as Quebec's leaders convince voters that an independent Quebec will maintain its membership in NAFTA, and thus remain economically buoyant, they can effectively reinforce their claim that Quebec need not recognize the Supreme Court's opinion in order to become a new nation.11 Furthermore, if Quebec attempts to secede from Canada "illegally"-i.e., in a manner inconsistent with the terms established in the QSR-succession to NAFTA would legitimize Quebec's actions.12 This note advances the proposition that the determination of whether Quebec should succeed or accede to NAFTA following independence should be made by an international tribunal established under Chapter 20 of NAFTA.13 The Government of Canada should convince the tribunal to condition Quebec's succession to NAFTA upon compliance with the principal mandates found in the QSR: secession only after a majority of Quebecers vote on a clearly-worded question, with full respect given to all minorities within its boundaries. If Quebec complies with these mandates and subsequently begins negotiations over secession with Canada in good faith, the tribunal should allow it to succeed to NAFTA; if Quebec ignores the guidelines, the tribunal should require it to accede. The authority for this solution rests on two premises found in international law: first, there is no definitive international rule governing succession of breakaway states to treaties, and second, judgments involving constitutional and international law from the Supreme Court of one country should be recognized by foreign courts and international tribunals. Justifications for the second premise include respect for the right to self-determination and the furtherance of a peaceful secession settlement. …

Foreigners Funding the Future: Investment Opportunities in Mexico's Privatized Pension System

Abstract: I. INTRODUCTION When we are young, we are supported by our parents; when we are old, we support ourselves-at least this is the way the world is supposed to function. Many people fail to plan for their retirement, so governments step in to provide a fallback through state-run social security systems. Several of the social security systems around the world, including those in the United States and Mexico, were established in response to the hardships of the Great Depression. These systems were intended as safeguards for those who could not, or would not, save for their own retirement. Unfortunately, these systems were not designed to compensate for a rapidly growing population which lives longer. After fifty years in practice, social security systems in many countries are headed toward bankruptcy. They can no longer guarantee sufficient payments to an aging population based on a redistribution of funds from the younger workers to the older retirees.1 One proposed solution to this problem is to privatize the social security pension system.2 Instead of investing the collected funds in low-return government bonds or using them to pay benefits to present-day pensioners, the government could transfer the funds to individual private accounts in the hopes of generating greater returns for the individual pensioners. Privatization also encourages saving by making workers individually responsible for their retirement. The prevailing system of pensions guaranteed by the national government provides a disincentive for individuals to save. Additionally, due to the greater rate of return received when investing on the open market, private investment of pension funds gives individuals more money for their retirement, albeit at greater risk.3 Privatization of state-run pension systems is increasingly popular in Latin America. It is seen as a continuation of the industrial privatization policies which were pervasive throughout the region in the 1980s.4 Chile was the first Latin American country to privatize its social security pension system, and its successful transition to a privatized system did not go unnoticed.5 In the mid-1990s, President Ernesto Zedillo Ponce de Le6n of Mexico recognized the impending collapse of Mexico's state-run social security pension system, caused both by mismanagement of the antiquated system and a severely devalued currency.6 In response, he replaced Mexico's fifty-year old, state-run, pay-as-you-go pension system with a new plan which substantially privatized the industry.7 Based on the Chilean model, Mexico's new law allowed for the establishment of private pension fund managers called Administradoras de Fondos para el Retiro [Retirement Fund Administrators] or AFOREs.8 The creation of AFOREs presents a significant opportunity for foreign investors who are interested in entering into the financial services sector in Mexico. Throughout most of this century, Mexico has been extremely protective of many of its industries, including financial services.9 Over the last decade or so, however, Mexico has relaxed its protectionist policies and opened many of its key industries, including financial services, to foreign investment. These changes in attitude toward foreign investment are reflected in provisions on foreign investment in the North American Free Trade Agreement (NAFTA), Mexico's new 1993 Foreign Investment Law, and now in the 1997 pension reforms which allow foreign ownership of AFOREs. This article argues that, although the chance to invest in AFOREs presents an important opportunity for foreign investors (particularly U.S. investors) to enter into the potentially lucrative financial services sector in Mexico, there are numerous flaws in the regulations governing AFOREs which could, in the long term, affect the profitability of these investments. Most significantly, AFOREs are prohibited from investing the funds under their control in foreign securities-they can only invest in domestic financial instruments. …