Globalisation, Federalism and Legal Pluralism: The Challenges of Diverse Legal Cultures in Federal Systems

Australia has recently had to address the structure of corporate law and regulation as a result of decisions in two High Court cases, namely Re Wakim; Ex Parte McNally (1999) 198 CLR 511 and R v Hughes (2000) 171 ALR 155. The constitutional problems posed by these two cases have currently been resolved using a referral of powers by the states to the Commonwealth. However, this agreement was not reached without difficulty, and uncertainty persists due to a five year sunset clause. The intense debate surrounding these events shed light on the continuing diversity in political and legal culture in the Australian states, and on the perception of business, government and academia concerning globalisation and its’ impact of the structure of law. On the other side of the world, the European Union is facing similar challenges, albeit on a different scale. The recent adoption of the Regulation on the European Company follows a history of thirty years of little progress. The impetus for the sudden adoption of this Regulation appears to have been due to the impact of economic globalisation, and the desire to increase competitiveness of the EU in a global economy. However, in order to achieve agreement of the Member States to the Regulation, the key issue of worker participation had to be addressed, an issue going to the heart of the issues of cultural diversity in the corporate law of Member States. This paper will consider the structure of law and its relationship to diversity of legal culture in federal or quasi-federal systems of government. The issues posed by the structure of corporate law are relevant to other areas of law, and the challenges faced by Australia and the European Union now will arise again in the future in the context of other ‘unions’, perhaps in the Australasian region.