Evasion (law)

This article is about the legal doctrine. For the act in ethics, see Evasion (ethics).

In law, the Doctrine of Evasion is a fundamental public policy. Whereas a person may legitimately plan affairs so as to avoid the incidence of obligations or liabilities imposed by the law, no one is allowed to evade the operation of otherwise mandatory provisions once duties and liabilities have been properly imposed or incurred. It is also a common principle in conflict of laws.

Definition

This is a standard doctrine in most jurisdictions: in France, it is termed, fraude à la loi, in Spain, fraude de ley, in Italy, violazione di norme di legge, in Germany, Rechtswidrige Umgehung eines Gesetzes. It reflects the need for governments to prevent their citizens from intentionally and improperly manipulating their behaviour to prevent mandatory provisions in the law from applying to them. As the translated names necessarily imply, the key is an intention to displace the normal operation of the legal system. Sometimes, this intention will be express. On other occasions, it will be for the courts to decide whether a sufficient intention can be imputed. Once the intention is established, the evasive manoeuvre will be void and the normal legal provisions will apply to the parties.

Examples

Taxation

Almost all states operate a collection system for taxation revenues within a framework of law, and enforced through independent courts. Enabling statutes must be strictly applied, and it is generally against public policy to allow the tax administration to agree to reduce the amount of tax payable by any one individual. Like criminal law where agreements by the policing authorities to exempt a criminal are prohibited, tax law has a special status as being essential to an organised society in maintaining public trust through the policy of equal treatment in the legal system. Nevertheless, if a tax payer organises his or her affairs so as to exploit a loophole in the law and avoid the incidence of tax liability, this will usually be permitted. It is not for the courts to legislate and plug the gaps left by the legislature. The test of avoidance will be whether there is a legitimate purpose for the given behaviour. Many states adopt a "business purpose" test, decomposing the transaction into its component steps to determine the true purpose of the transaction(s) (see tax avoidance/evasion).

Family law

In Family Law, the citizens of one state are not allowed to evade, say, the rules relating to marriages by blood relatives or by persons of the same biological sex, simply by travelling to and going through a ceremony in a state that does permit such marriages. The policies underpinning such laws are so fundamental to the culture of a state that they acquire mandatory status (see nullity in the conflict of laws). The same applies to divorce. An early case in France (under the civil law system) known as the Princess Bauffremont Affair decided by the Cour de cassation in 1878 [Civ. 18 mars 1878, S.78.1.193 (note Labbé)] saw the princess obtain citizenship in Germany for the purpose of obtaining a divorce there and then remarry, returning to France where she attempted to re-establish herself. Because the divorce was not recognised in France, her remarriage was declared null as a fraude à la loi.

Contract law

In Contract Law, as an exception to the principle of autonomy implicit in the policy of freedom of contract, the parties cannot by entering into a voluntary agreement evade obligations imposed by law nor prevent the courts from taking jurisdiction in the event that a dispute arises. And, as with tax, the courts will examine the entire context for any series of transactions that seeks to avoid the operation of law. Hence, if it is illegal to export particular goods from State X to State A, such a law cannot be evaded by entering into back-to-back agreements to export the goods first to State Y and thence to State A. Some laws are sufficiently fundamental that they can never be evaded. Thus, even though the contracts might be perfectly legal, they would be denied enforcement if the effect would be against public policy. The most common policies are those which:

involving commission of a tort or crime;
inducing breach of fiduciary duties;
inducing a breach in a contract with a third party;
disclaiming liability for harm caused intentionally, recklessly or negligently (including liability for any misrepresentation). Liability for personal injuries arising from the use of products can be disclaimed only in rare circumstances (e.g., two merchants fairly bargain for it, and the product is experimental).
involving the waiver or release of entrenched rights, e.g. in the United States, the release of rights granted by the Age Discrimination in Employment Act of 1967, 81 Stat. 602, 29 U.S.C. § 621 will not be effective even if supported by consideration unless certain mandatory requirements set out in the Older Workers Benefit Protection Act are complied with.

Conflict of laws

At either the characterisation or the choice of law stage, the most usual manipulation involves the way in which the connecting factors are pleaded as between the lex fori and the lex loci so that inconvenient local laws are evaded in favour of a "foreign" law.

Detection

Under the law of the United States with the Drug Trafficking Vessel Interdiction Act, it is illegal to operate or embark in a submersible vessel or semi-submersible vessel without nationality on an international voyage[1] with the intent to evade detection.[2] This is curious because one of the required proofs of nationality are documents issued under the 1958 Convention on the High Seas,[3] a convention which Congress has refused to ratify[4] and therefore acknowledge.

Notes

  1. ↑ Pub.L. 110–407, §101
  2. ↑ 18 U.S.C. § 2285(a)
  3. ↑ 18 U.S.C. § 2285(d)(1)
  4. ↑ Roger Rufe, President of the Ocean Conservancy. Statement before the Senate Committee on Foreign Relations, October 21, 2003.
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