Legal System

Gibraltar’s legal system is based on English Common Law. Despite the fact that the courts apply English common law and equity as a general rule, the vast majority of Gibraltar’s commercial legislation has been designed in order to foster a favorable climate for the financial services industry. For instance, Gibraltar’s laws on banking secrecy and the confidentiality of offshore company management are significantly more rigid than that of the United Kingdom.

Generally speaking common law, as opposed to civil or socialist law, is a type of legal system where legislation is continually evolving. Courts refine and create laws on a case-by-case basis. When resolving a legal dispute, in the ideal world, a common law court looks to precedents set by other courts. What this means is that when a court is resolving a dispute, it must look to see if a similar dispute was resolved in the past. If one has, then the present day court is obligated to following the same reasoning used in the prior case; this principle is called stare decisis. On the other hand, if the dispute is totally unique, the court may resolve the matter itself using general guidelines. This new decision then becomes the precedent to which all future cases are bound. Over the years, the precedents created by past decisions coalesce into a complicated set of rules that apply to a wide array of case; this collection of rules is known as “common law”. Of course, common law systems are much more complex in practice, nevertheless the principle of stare decisis as described above, is the foundation of all common law systems.

Privacy

At this time the government of Gibraltar has neither signed a Tax Information Exchange Agreement nor a Mutual Assistance Treaty with the United States. Moreover, Gibraltar is full participant in the European Union Savings Directive and thus has agreed to share personal information with other nations. As such, Gibraltar does not offer a high level of privacy protection to European Union citizens. Although Gibraltar has thus far protected the privacy of some its foreign investors, its commitment to protecting the privacy of offshore investors as a whole is questionable based upon its willingness to share information with European Union members.