Abuse of Law

by Filippo Ranieri

1. The legal concept of abus de droit

In the second half of the 19th century, it was in French case law that the legal concept of abus de droit first appeared as an argument in continental European law. Ever since the publication of the first legal commentaries on the general clause of tortious liability in Art 1382 of the French Code civil it was generally accepted that the rules of tortious liability could not be applied where a person makes use of a right conferred upon him. However, since the mid-19th century, the French case law has developed some exceptions to this principle with the consequence that a person could be held liable when making use of a right if this use was considered to be abusive.

Even though French and, later on, Italian scholars generated plenty of literature relating to this subject matter, the academic and legal-philosophical categorization of the abus de droit concept remained vague. In this respect, some authors referred to the legal concept of aemulatio vicini, as found in Roman sources (Vittorio Scialoja (1856–1933)), whilst others saw the concept of abus de droit as being part of the conflict between law and morality (René Savatier (1892–1984)). Yet other authors described the abus de droit concept as an abnormal exercise of a right, which involved using a subjective right beyond its economic and social purpose (Raymond Saleilles (1855–1912)). As could be expected, the abus de droit concept also encountered strong and categorical resistance from some jurists who argued that it was self-contradictory because it presumed the concurrent coexistence of legal right and wrong (as articulated by Marcel Planiol (1853–1931) in France and Mario Rotondi (1900–1984) in Italy).

Within the French school of thought one opinion became predominant: Étienne-Louis Josserand (1868–1941) differentiated between an objective and a subjective meaning of abus de droit. In the case of a legal right exercised with reprehensible intent, ‘abuse of law’ was said to be subjective; conversely, it was considered objective if the exercise of a legal right had been taken beyond its purpose, regardless of the right holder’s psychological mindset. The legal concept of abuse of law has been, and continues to be, unknown to the English common law. Up to today, the famous dictum of Lord Halsbury in The Mayor, Aldermen and Burgesses of the Borough of Bradford v Pickles [1895] AC 587; [1895] 1 Ch 145 (see also Chasemoze v Richards [1859] 7 HL Cases 349) remains valid: ‘If it was a lawful act, however ill the motive, he had a right to do it’. According to Lord Watson (The Mayor, at 598), the Roman concept of aemulatio vicini has lost any relevance in Scottish law as well. Whether this description truly reflects modern English law, however, seems to be increasingly contested in Anglo-American literature.

2. The legal concept of Rechtsmissbrauch

Initially, the French concepts did not meet with a positive response in German law. Even in the case law following the codification of the German Civil Code in 1900 Bürgerliches Gesetzbuch (BGB), the Reichsoberhandelsgericht (with Reichsgericht) (Supreme Court of the German Empire) continued to take into consideration the application, under the ius commune, of the exceptio doli generalis, first by applying § 826 BGB and later by relying on the principle of good faith enshrined in § 242 BGB. Even though the German Civil Code of 1900 had introduced a prohibition of chicanery (Schikaneverbot) in its § 226, the legal requirements regarding a person’s intention to make a deceitful use of his right were remarkably demanding so that § 226 appeared to lack any practical relevance. Particularly after World War I, cases involving the abusive exercise of law had been mainly dealt with by the Reichsgericht under the general principle of good faith (§ 242 BGB). Prominent examples of this approach can be seen in the development of the concept of Verwirkung (estoppel) as well as in the case law of the Reichsgericht relating to abuses of majoritarian positions in corporate group law or in competition law.

In the mid-1930s, this case law was qualified as belonging to the category of unzulässige Rechtsausübung (inadmissible exercise of legal rights). It was mainly a monograph by Wolfgang Siebert (1905–59) through which the ideas of Josserand filtered into German literature. Nevertheless, the evolution of French and German law was marked by substantial differences. The concept of abus de droit has been qualified as belonging to the field of Principles of European Tort Law (PETL), whereas German scholars described the legal concept of unzulässige Rechtsausübung as falling within the scope of the principle of good faith. In contrast to French literature, Wolfgang Siebert’s theory on unzulässige Rechtsausübung provided a further theoretical justification for judicial adjustments of subjective legal positions. In their worst form, such adjustments represent improper interventions, undermining both statutory and contractual norms. In this context, newly published research has clearly revealed the political and ideological background to this theory of the mid-1930s and its links to National Socialist ideology.

3. The continental reception

The legal concept of abuse of law has been adopted by numerous 20th-century civilian codifications. The draftsmen of the German BGB, however, still rejecting the idea, continued to concentrate on the Roman concept of aemulatio vicini which was codified in § 226 BGB. As we have seen above, codifying a prohibition of chicanery has as of yet brought about only very insignificant results in practice. In contrast to the German approach, the Swiss Civil Code of 1912 determined in Art 2 that an exercise of law should be governed by the principle of good faith, and it also prescribed that an ‘obvious abuse’ (offenbarer Missbrauch) of law should be legally disapproved of. Henceforth, this Swiss norm served as a role model for equivalent provisions in further continental private law codifications. Article 74 of the 1927 Franco-Italian Draft of a law of obligations or a norm identical to Art 2 of the Swiss Civil Code included in the last draft of the Fourth Book of the new Italian Civil Code provide examples. However, the Italian legislator of 1942 abstained from adopting such a norm with the result that the Italian Codice civile merely comprises a prohibition of vexatious exercises of a right in its Third Book on Property Law (Art 833). Similarly, the Polish law of obligations of 1933 was modelled on the Franco-Italian Draft of a 1927 law of obligations insofar as it recognized a prohibition of abuse of law in Art 135. The same holds true for § 281 of the Greek Civil Code of 1941/46. Likewise, several private law codifications enacted post-World War II have included similar provisions. Despite its rephrasing in 1990, Art 5 of the Polish Civil Code (kodeks cywilny) of 1964 is worth mentioning. A prohibition of an abusive exercise of law contrary to the principle of good faith has also been codified in Art 334 of the new Portuguese Civil Code (Código civil) of 1966 as well as in Art 7 of the Título preliminar in the 1974 revised version of the Spanish Civil Code (Código civil). Moreover, § 4 subpara 1 of the Hungarian Civil Code, inserted by the Reform Act No XIV of 1991, and § 6 of the 2002 Estonian Law of Obligations deserve attention. Finally, mention may be made of § 1:6 (prohibition on abuse of law) of the 2006 Hungarian Preliminary Draft and § 1465 of the 2005 Czech Preliminary Draft. It seems important to note that the majority of these recently enacted provisions do not follow the French example of defining abuse of law in the context of tortious liability, but use the German and Swiss model instead which considers abuse of law as a manifestation of the principle of good faith.

In Italian law, earlier legal scholars were decisively opposed to the legal concept of judicial control of allegedly abusive exercises of a right. In particular, they rejected the path followed by German case law in relation to § 242 BGB. This attitude remained unaltered in the decades following the entry into force of the Codice civile of 1942. Specifically, Italian literature and case law refused to derive a general principle from isolated statutory provisions found in the new codification. More recently, Italian doctrinal opinion has shifted significantly. Notably, the notion that the principle of good faith marks a general limitation for any exercise of a right has achieved impressive success, mainly owing to Art 1375 Codice civile. Nowadays, this reorientation has also been implemented by the Corte Suprema di Cassazione (Supreme Court of Cassation). As a result, in present-day Italian law reference is not made to a specific doctrine of the prohibition of an abusive exercise of rights, but the subject matter is dealt with rather as a violation of the principle of buona fede or as an application of the exceptio doli generalis. A similar development can be observed in Dutch law which codified this legal idea in Art 3:2 Burgerlijk Wetboek (BW) of 1992. Interestingly, this provision states that a legal norm which would apply in principle to the parties shall not be applicable if such an application would be unacceptable according to the criteria of honesty and equity. In recent times, the European Court of Justice has created a considerable body of case law sanctioning obvious abuses of legal positions conferred by EU law. For example, the European Court of Justice sanctioned as early as 1974 an abusive use of EU law which was directed at evading the application of national law (ECJ Case C-33/74 – van Binsbergen [1974] ECR 1299; see also ECJ Case C-115/78 – Knoors [1979] ECR 399 para 24 and ECJ Case C-370/90 – Singh [1992] ECR I-4265). The same holds true for abusive and fraudulent uses of rights conferred by EU law (see, eg, ECJ Case C-110/99 – Emsland-Stärke GmbH [2000] ECR I-11569). In view of the general European development, it seems more than reasonable that the idea according to which the principle of good faith constitutes a general limitation for any exercise of a right has also been adopted by Art 1:201 of the Principles of European Contract Law (PECL).

Literature

Virgilio Giorgianni, L’abuso del diritto nella teoria della norma giuridica (1963); Mario Rotondi (ed), Inchieste di diritto comparato 7. L’Abus de droit (1979); Peter Mader, Rechtsmissbrauch und unzulässige Rechtsausübung (1994); Hans-Peter Haferkamp, Die heutige Rechtsmissbrauchslehre—Ergebnis nationalsozialistischen Rechtsdenkens? (1995); Anders Kjellgren, ‘On the Border of Abuse. The Jurisprudence of the European Court of Justice on Circumvention’ [2000] EBLR 179; Michael Taggart, Private Property and Abuse of Rights in Victorian England. The Story of Edward Pickles and the Bradford Water Supply (2002) 145–93; Nicoletta Sarti, Inter vicinos praesumitur aemulatio': le dinamiche dei rapporti di vicinato nell’esperienza del diritto comune (2003); Denis F Waelbroeck, ‘La notion d’abus de droit dans l’ordre juridique communautaire’ in Mélanges en hommage à Jean-Victor Louis (2003) 595; Elspeth Christie Reid, ‘The Doctrine of Abuse of Rights: Perspective from a Mixed Jurisdiction’ (2004) 8(3) Electronic Journal of Comparative Law <www.ejcl.org/83/art83-2.html>; Stéphane Abbet, De l’exceptio doli à l’interdiction de l’abus de droit: étude de droit romain et de droit suisse (2006); Laura Melusine Baudenbacher, ‘Überlegungen zum Verbot des Rechtsmissbrauchs im Europäischen Gemeinschaftsrecht’ [2008] Zeitschrift für Rechtsvergleichung 205–18; Rita de la Feria and Stefan Vogenauer (eds), Prohibition of Abuse of Law—A New General Principle of EU Law? (2011).