A FRENCH LAWYER LOOKS AT BRITISH COMPANY LAW*
| DOI | http://doi.org/10.1111/j.1468-2230.1982.tb02466.x |
| Author | Andre Tunc |
| Published date | 01 January 1982 |
| Date | 01 January 1982 |
THE
MODERN
LAW
REVIEW
Volume
45
January
1982
No.
1
A FRENCH LAWYER
LOOKS
AT
BRITISH
COMPANY
LAW
*
As
everyone can presume, the title of this lecture is
a
tribute to
Harry Lawson.
A
Common
Lawyer
Looks
at the
Civil
Law‘
was
such an enrichment both for the civilian reader and for the common
lawyer that one
is
tempted, if not to emulate the master, at least to
try to follow his path.
I
have been, among other fancies,
a
student
of British company law for perhaps the last two decades. My interest
in British company law was prompted by the feeling that for
a
foreigner much profit could be derived from the research, that much
in British company law could be of aspiration to someone seeking
to improve his national law.2
I
have never been disappointed.
Occasionally, however,
I
have been surprised by what appeared to
me possible weaknesses of British company law.
In
this lecture,
I
sliall try to collect my various reactions. Thus, judgments will some-
times emerge from
my
remarks even though my purpose is not in
the least to bestow the palm to your law or to ours.
It
goes without
saying that
I
shall endeavour to be absolutely candid. It would be
ridiculous to try to
“
sell
”
you French company law while for more
than a century, we have received
so
much from you. On the other
hand, it would be unworthy
of
you to hide my feelings when on
some other points
I
prefer French law.
Obviously, it will not be possible to consider all aspects of com-
pany law. Somewhat arbitrarily perhaps, my remarks will concentrate
on two points, namely: the environment
of
British company law and
the organisation of
a
corn pan^.^
*
The Tenth Chorley Lecture delivered at the London School
of
Economics,
1
With a foreword by Hessel
E.
Yntema (1953).
2
Compare
0.
Kahn-Freund.
“
On
Uses
and
Misuses
of
Comparative Law
”
(1974)
37
M.L.R.
1.
For an earlier and broader comparison
of
European (especially French) and
British company law, see J.
A.
Usher, “The Rights
of
Individual Shareholders in
Companies,” in
J.
W.
Bridge,
D.
Lasok,
D.
L. Perrott and
R.
0.
Plender (eds.),
Fundamental Rights
(1973), p. 254;
A.
Tunc,
“A
Comparison
of
European and
British
Company Law,” in C.
M.
Schmitthoff (ed.),
The Harmonisation
of
European
Law
(1973), p. 28.
June
10,
1981.
VOL.
45
(1)
1
1
2
THE MODERN LAW REVIEW
[Vol.
45
By this broad and somewhat vague term: “environment,”
I
wish
to refer, first,
to
some institutions which contribute to a proper
working of the law and, secondly, to the sources and mechanisms
of the law. institutions
Institutions within which the law operates may be as important as
the law itself, or even more important: this is the first
lesson
I
derived from the study of British company law.
We can envy your financial press or even the financial section of
your best newspapers. They bring to the ordinary shareholder
information and elements for judgment and decision. They are
also part of the conscience
of
the managers of companies and
permanently press them to work ethically and efficiently. The
French financial press has greatly improved since the Second World
War, partly under the influence of the
C.O.B.,
to which
I
shall come
later. As far as
I
can see, however, it has not yet reached the level
of yours.
It was also a great surprise for a French lawyer before the
Companies Act
1980
to find that you had no procedure whatsoever
for the control of the payments of shares in kind, not only in private
companies, but in public ones, where the danger of a lack of con-
trol for those who have paid in cash is obvious and seems important.
In France, we have long been accustomed to a lengthy pro-
cedure4: appointment by the court
of
one or more coinmissaires
aux
appwts, report by them to the shareholders and approval by
the shareholders in
a
statutory meeting which votes the creation
of the company. The lack
of
procedure in Great Britain was to a
certain extent made possible by the amount of disclosure required
for the flotation of the capital.6 As far as
I
can see, however, the
main substitutes to an official and formal control were the ones
exercised by issuing houses, brokers and jobbers, and the Stock
Exchange.
I
quote from Gower’s Principles
of
Modern Company
Law
6:
“The new issues market is now virtually monopolised by a
I.
THE
ENVIRONMENT
OF
BRITISH
COMPANY
LAW
4
Sce
Loi no. 66-537 du
24
juillet 1966 sur les sociEtb conrmerciales,
Art. 80;-
J.
Hdmard.
F.
Terrd, P. Mabilat,
Socikt6s anonymes,
Vol.
I,
nos. 713-729 (1972);
J.
Hamel,
0.
Lagarde,
A.
Jauffret,
Droit commercial,
Vol.
11,
nos.
606-608 (2nd
ed.,
1980)
;
R.
Roblot,
Trait6 6lJmentaire de drDit cummercial de Georges Riperr,
Vol.
I,
nos.
1093-1100 (10th
ed.,
1980);
Y.
Guyon,
Droit des aflaires,
no. 287 (1980).
In the case
of
a “private” company
(constitution sans appel public
b
I’kpargne).
there is no statutory meeting, but control
of
payments in kind is still necessary:
see
Loi
1966,
Art.
86;-HBmard,
Ted, Mabilat,
op.
cit.
no. 783; Hamel, Lagarde,
Jauffret,
op. cif..
no. 618; Roblot,
op.
cit.
no.
1130;
Guyon,
op. et loc. cit.
6
For
a reappraisal
of
the disclosure philosophy in company law, see L. Scaly,
“The Disclosure Philosophy and Company Law Reform”
(1981)
2 Co. Law.
51.
Such
a
questioning was started in the United States some years ago. The most
radical attack against the disclosure philosophy is probably
H.
Kripke,
The
SEC
ond
Corporate Disclozure. Regulation in Search
of
a
Purpose
(1979).
6
(4th ed.) by L.
C.
B.
Gower. J.
B.
Cronin,
A.
J. Easson, Lord Wedderburn
of
Charlton (1979; supplement 1981).
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