Following is the sixth of an eight-part article by Dr Lu'ayy Al Rimawi, Jordanian academic/practitioner who taught law at the London School of Economics, published extensively on regulatory aspects in the UK and is currently visiting lecturer at Cambridge University, analysing shareholders' right to sue for being induced to buy shares in public offering under Jordanian and UK laws:
In explaining what constitutes "injurious acts", the Explanatory Memorandum refers generically to "unlawful acts" or "acts that breach the law", stating that tortious acts incorporate "negative acts", be they deliberate or negligent. The Explanatory Memorandum leaves determining "injurious acts" to the judge, who should be guided by the principle that: "Members of the public owe a duty of care in their acts equivalent to what is expected of ordinary people."
The above interpretation of injurious acts by the Explanatory Memorandum comes as a contradiction and represents the source of inconsistency under the JCC. For, the Explanatory Memorandum without any prior warning is in effect talking about Art. 1297 of the Austrian Civil Code, which is based on fault, rather than injury as stated by Art. 256. This inconsistency, which has serious legal ramifications, is due to the simple fact that the draftsmen of the JCC were copying word-for-word the explanation of "injurious act" provided by the Preparatory Works of the Egyptian Civil Code.
The reason behind the persistent influence of the ECC on the JCC is the formative impact of the ECC on Arab civil codes. Three of the five experts who had significant input in drafting the JCC were Egyptians. The drafters of the ECC forwarded Art. 1297 to explain the standard of care under the ECC. The stance of the draftsmen of the JCC is bewildering, given that tortious liability under the ECC is based on fault, not injury. [This in turn is based on Latin codes, particularly the French Civil Code -- Art. 1382.]
Art. 164 of the ECC states: "Every fault that causes injury to others renders the tortfeasor liable for compensation." This is symptomatic of the conceptual confusion, which filters through to the Court of Cassation.
The influence of the Egyptian legal system, which is based on fault not injury, was no stronger than among Jordanian judges who studied in Egypt. In one of the few insights into the legal thinking of Jordanian judges on this question, one clearly sees the full impact of the Egyptian legal system -- no clearer presented than in a rare study on the subject matter by a Jordanian judge, A. Al Essess, titled "Intention in fault: As fault is a constituent element in tortious liability". [LSJ (1971), pp. 827-74]
What adds to the considerable conceptual legal confusion is that Jordanian courts have, on many occasions, taken the extraordinary decision to completely ignore the JCC. They, instead, apply fault as the criterion for liability for negligence not injury, as prescribed by Art. 256, aided, of course, by the contradictory commentary of the Explanatory Memorandum on what constitutes an "injurious act". However, it must be stated clearly that the requirement of fault in tortious acts was pervasive even before the JCC. The Court of Cassation often referred to tortious liability as "fault liability", requiring "fault", "injury" and "causal connection between them".
Establishing injury
Tortious injury relates to harm inflected on persons, their properties, legitimate interests or rights, be they financial or other. The JCC accepts that persons can relate to individuals or non-individuals alike. Concerning "properties", the JCC accepts that they are everything that has a material value in dealings. Art. 53 prescribes: "Property is every item or right, which in dealings has a material value."
As to "financial rights", Art. 54 of the JCC states: "Everything that can be possessed either materially or morally and benefited from legitimately, and is not excluded from dealing because of its nature or law can be the subject matter of financial right."
Thus, shares offered in a public offer are included in the definition of property under the JCC. However, including shares as a recognised form of property should not be taken for granted. For, this is not necessarily the unanimous view of Sharia, particularly the Hanefite School. Indeed, the Hanefite jurists are averse to loosening the definition of property, restricting it only to items that can be hoarded in a material sense. It has therefore been particularly argued that the JCC, unlike other Arab civil codes, has expanded its understanding of property so that it would not be restricted by the narrow Majallat definition. However, as well as material harm, the concept of injury under the JCC also incorporates moral harm. The Court of Cassation has supported this view.
Tortious injury in Jordan should be certain, even if it were to take place in the future. The Court of Cassation refuses to accept future harm that is not certain, for example. It draws attention to "possible injury" and "future injury that is nevertheless certain". It expands the meaning of certainty to include events that are probable to a very high degree. The victim must provide evidence of the injury, and prove before the court that the particular injury is the direct result of the injurious act committed by the tortfeasor, not other factors. If injury is the fault of victims, or due to their acts, there may not be liability on tortfeasors.
Shareholders in Jordan can prove injury through all means of evidence, most common of which is experts' report submitted to the court of substance. The depreciation of the value of shares due to tortious acts would be considered as injury. However, unlike the situation under taghreer, that requires the combination of ghubin fahish, shareholders do not have to prove that the loss in the value of the shares was excessive or fahish. For example, depreciation in the value of the car is considered injury; so is depreciation in the value of the land.
© Jordan Times 2005
