The Role and Functions of Law
Every individual seeking n a particular game such as chess or any other sport can only do so after understanding the rules governing interactions during play. It enables a player to understand what each party’s purpose is in the game while also allowing each one to penalize the other for breaking the rules of engagement. The business environment is much more complex in comparison to games wince there are numerous players with different capacities spanning a much wide geographical area. Different types, functions, and roles of law exist to ensure that the country, state, or area where a business operates supports clearly defined purposes that business owners, workers, trade unions, customers, and other actors abide by.
The Roles of Law and Courts in Today’s Business Environment
Laws create a legally even playing ground where different actors act with such knowledge as to allow business operations that act within the law to thrive and illegal ones to suffer punitive measures through the courts. Courts act as enforcers of all these laws towards ensuring all persons benefit from them (Reed et al., 2013). For instance, a country’s constitution defines what property is given its significance in every business engagement. It ensures that a person’s claim to such property is justified and protected in accordance to constitutional law. Contract law offers guidelines to how property owners are able to legally exchange and seek resources from others in society such as employees while regulatory/administrative laws function as public laws regulating, taxing, and redistributing resources held by different owners. Criminal law functions to protect all societal members from persons who harm property or owners of property and serve punishment accordingly (Reed et al., 2013). Tort law and the law of business organizations are avenues through which corporate or individual entities do business in an honorable, ethical, and legally acceptable manner.
Federal Court Structure versus States Court Structure
Federal and state courthouses exist in the same cities within various regions in America. The two distinct types of courts follow different judicial systems, law enforcement apparatus, laws, and handle different case types. Each one of the 51 states within the U.S. operates under its own constitution which offers provisions for a unique judicial system (Reed et al., 2013). A number of state constitutions are essentially older than the country’s unifying constitution while others are much younger while others appear more vibrant in comparison to the federal constitution. However, the federal constitutions override state constitutions implying that federal courts are the courts of last resort in the U.S. subject matter jurisdictions determine whether a particular case is to be heard in a state or federal court (Reed et al., 2013). For instance, suits between states or those touching on property owned by the national government are handled by federal courts. Most criminal and business suits are handled within the precincts of state law. The defendant or plaintiff is allowed by federal law to seek justice via federal courts where it is felt that the state court has failed to offer sufficient redress.
The Concept of Judicial Review
It refers to the power and authority accorded to the U.S. Supreme Court to quash a law enacted by the legislature or executive based on its unconstitutionality. Marbury v. Madison (1803) set this precedent (Ray, 2016). The defendant sought to have his appointment as a federal judge allowed given that it has been unconstitutionally disallowed by the Secretary of State, James Madison (Ray, 2016). This served to ensure that the judiciary bore the same authority as the legislative and executive arms of government thus enabling each to check the actions of the other two.
Law and the Financial Services Industry
The Securities and Exchange Commission was forced to act after the Enron and other major scandal gravely put the investors, employees, and other stakeholders at risk. Through the Sarbanes–Oxley Act, the legislature availed novel guidelines through which all business including large corporation expressed the financial health of institutions (Ramamoorti, 2018). This is to ensure all stakeholders are privy to a true ad fair state of affairs of an entity (Ramamoorti, 2018). If a business attempts to contravene the new law, stakeholders can look to the courts to seek legal redress.
Alternative Dispute Resolution (ADR)
In the contemporary social setting, individuals who have encountered a point of disagreement relative to business interactions can either seek to seek recompense in a court of law or via out of court settlements. The out of court settlements are referred to as alternative avenues of dispute resolution or ADR (Reed eat al., 2016). These include mediation, a mini-trial, arbitration, summary jury trial, and negotiation. ADRs are often preferred over court processes since they are not only faster but also significantly cheaper. These also limit negative exposure of either party to the general public which may otherwise damage the corporate image (Blake, Browne, & Sime, 2016). In the financial services sector, firms often seek arbitration where by an impartial but knowledgeable and experienced person who acts as an arbitrator in the proceedings. The arbitrator enables both parties reach an agreement where if either one fails to observe can be enforced through court action (Blake, Browne, & Sime, 2016). A mini-trial is an ADR mechanism where aggrieved parties present lawyers who test the case thereby shedding light on the settlement decisions a court of law would have made (Blake, Browne, & Sime, 2016). A mini trial is heard by a panel selected by both parties to ensure impartiality. It is a distinct type of ADR since it is often initiated after formal litigation has been instituted.
Reed, O. L., Shedd, P. J., Morehead, J. W., Pagnattaro, M. A., & Cahoy, D. R. (2013). The legal and regulatory environment of business (p. 328). McGraw-Hill/Irwin.
Blake, S. H., Browne, J., & Sime, S. (2016). A practical approach to alternative dispute resolution. Oxford University Press.
Ray, C. (2016). John Marshall, Marbury v. Madison, and the Construction of Constitutional Legitimacy. Law, Culture and the Humanities, 1743872116650867.
Ramamoorti, S. (2018). Discussion of Economic Analysis of Proposed PCAOB Standards: Finding a path forward. Accounting Horizons.