The Role & Functions of Law

The Role & Functions of Law

Court Structure, Judicial Review, & Alternative Dispute Resolution

Business Law Perspective

The US judicial system is based on English Common law (Kellogg, 2003). This system of justice is designed to create a means of resolving disputes as well as approving laws that are made by Congress (Kellogg, 2003). To fully understand this system one must understand its context within society. Law is created through a legislative process in which congress creates laws that must be approved by both the executive and judiciary (Kellogg, 2003). This is the description of lawmaking at the federal level but it is applicable to the state level because instead of the executive the governor of a state would sign the bill. As well, rather than congress, a state legislative body would typically create the law. Laws are created similarly both in the federal and all states. Lawmaking in the US is a broad area of legislation and includes, criminal, tort, administrative, medical, and business law (Kellogg, 2003). For the purpose of clarity, the roles of law and different judicial processes will be discussed in terms of business law.

Court Structure

To better understand the roles of courts in law, one must understand the court structure. The federal court structure is ubiquitous to all states in the US. This similarity in courts is the result of the adherence to the Constitution. The Constitution provides the greatest authority for lawmaking because it is the Constitution that provides the authority to government bodies such as Congress and the president (Johnson, 2003). This is true of state governments as well. The US court system is structured with a dual court system that includes State and Federal Courts (Johnson, 2003). Both courts are designed similarly. The state and federal court systems function in the same manner with the major difference between them being the types of cases that each system has authority over.

State Courts deal with a variety of cases that can include: vehicle violation as well as criminal cases. States have their own laws also such as requirements for doing business as well as licensing which may differ from other states. For example, the court structure in California is designed in this manner:

• Supreme Court
• Courts of Appeal
• Superior Court (California Courts, 2016).

This design is similar to the federal system which consists of:

• Supreme Court
• Courts of Appeals
• District Courts
• Bankruptcy Courts (Johnson, 2003).

The major difference between these courts is either the type of case or the severity of the crime. For instance, state courts will serve common crimes or civil cases while federal courts will deal with crimes that are either specific to the federal government such as treason or large civil cases that exceed $30,000.00 (Johnson, 2009). Federal courts hold authority over state courts and a person may appeal a decision through the state court appeals process and then move into the federal appeals process (Johnson, 2009). This process is the same for most legal situations including business cases.

Judicial Review

One of the most unique aspects of the US court system is the concept of judicial review. Judicial review is the idea that a law can be rejected based on its incompatibility with the constitution. For example, if a state congress makes a law that violates a person’s civil rights, the supreme court of the state or the Supreme Court of the US may invalidate such law. Judicial review is an important facet of business law because laws that may hamper a business or force it to operate in a way that may be detrimental to individual rights can be invalidated. An example of this would be the recent dispute between Apple and the FBI in which Apple refused to create a means of hacking its customers' phones.

Alternative Dispute Resolution

The court process is a long and expensive process. As a result of this cost and time, many businesses have turned to the use of Alternative Dispute Resolutions (ADR). ADR is a system of resolution to the conflict that utilizes an objective party. The most common form of ADR is arbitration. This is when a third party is used to hear a case (California Courts, 2016). Both parties in the dispute agree to the terms of the arbitration and allow the objective party to hear the case. This is often used in business to settle disputes between companies and employees or between companies and unions (California Courts, 2016).

Another form of ADR is mediation. Rather than going to court, many companies will use mediation which is a form of compromising. Both parties agree to the mediation and the mediator will try to help both parties reach a resolution that is workable for both (California Courts, 2016). This type of ADR is used normally where there is a relationship that is important to both parties such as a vendor and company who work together (California Courts, 2016).

ADR is not a court, and this means that it is faster and often less costly. However, in most instances, ADR is not binding and this means that either party can reject the decisions and pursue a court settlement.


Johnson, C. W. (2003, June 20). How our laws are made. Retrieved from

Kellogg, F.R. (2003). Holmes, Common Law Theory, and Judicial Restraint. John Marshall Law Review 36 (winter): 457–505.

California Courts (2016). Advantages and disadvantages of ADR understanding alternative dispute resolution. Retrieved from

Photo by Bill Oxford on Unsplash


Triola Vincent. Thu, Jan 07, 2021. The Role & Functions of Law Retrieved from

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