AUTHOR: Frances H. Foster, Edward T. Foote II Professor of Law, Washington University School of Law, St. Louis
ARTICLE: “American Trust Law in a Chinese Mirror,” 94 Minn. L. Rev. 602 (2010)
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Professor Foster’s article considers the impact on China’s comparative law literature and how it was influenced by U.S. trust law. It concludes that legal reformers in the United States can learn from Chinese commentary and legislative history to identify weaknesses and flaws in our own trust law.
Part I of the article explores the history of “legal transplants,” which is defined as “the moving of a rule or a system of law from one country to another” and its impact on comparative law. The author provides a balanced study of the proponents and critics of the legal transplant theory with particular emphasis on whether such transplants are successful in spreading the “rule of law” observed by developed countries, noting that the culture and societal norms of the importing country as well as the subject matter are determining factors.
The author then focuses her article on the impact of trust law in China, which is one of many civil law jurisdictions that has adopted common principles of our trust laws such as cy pres, spendthrift protections and fiduciary concepts. Although the Chinese have adopted many of the same principles of our trust laws, their comparative law literature provides useful insight into the development and implementation of their laws, revealing some flaws in our own trust laws.
Part II of the article traces the roots of the Chinese trust law literature and the reasons for the Chinese adoption of trust law, namely that trust law was becoming part of the “global legal system” and as a larger player in the world order, China should adapt its laws to the economic realities.
The author cites many Chinese commentators who have identified flaws in the Anglo trust laws and the need to integrate them with Chinese customs and its economic system, in essence “absorbing what is useful and discarding what is not.”
The final part of the article, which defines the author’s main thesis, suggests that much of the comparative law literature fails to reflect upon the borrowing country’s experience in transplanting the law. The author demonstrates that by studying what China’s trust law rejected and its critique of our trust law, we can identify numerous flaws and weaknesses in our own system. In particular, she persuasively argues that U.S. trust law leaves beneficiaries unprotected from trustee abuse and that it has become unbalanced by favoring trustees at the expense of settlors.
Although the article is laden with 333 footnotes, it provides an interesting perspective on how the study of comparative law has evolved and how we can learn from these transplants.