Lex Mercatoria - Administration

Administration

The lex mercatoria was the product of customs and practices among traders, and could be enforced through the local courts. However, the merchants needed to solve their disputes rapidly, sometimes on the hour, with the least costs and by the most efficient means. Public courts did not provide this. A trial before the courts would delay their business, and that meant losing money. The lex mercatoria provided quick and effective justice. This was possible through informal proceedings, with liberal procedural rules. The lex mercatoria rendered proportionate judgements over the merchants’ disputes, in light of “fair price”, good commerce, and equity.

Judges were chosen according to their commercial background and practical knowledge. Their reputation rested upon their perceived expertise in merchant trade and their fair-mindedness. Gradually, a professional judiciary developed through the merchant judges. Their skills and reputation would however still rely upon practical knowledge of merchant practice. These characteristics serve as important measures in the appointment of international commercial arbitrators today.

The lex mercatoria owed its origin to the fact that the civil law was not sufficiently responsive to the growing demands of commerce, as well as to the fact that trade in premedieval times was practically in the hands of those who might be termed cosmopolitan merchants, who wanted a prompt and effective jurisdiction. It was administered for the most part in special courts, such as those of the gilds in Italy, or the fair courts of Germany and France, or as in England, in courts of the Staple or Piepowder.