Showing papers in "Cambridge Law Journal in 2000"

Standing under the Human Rights Act 1998: Theories of Rights Enforcement & the Nature of Public Law Adjudication

Abstract: The Human Rights Act enables applicants in judicial review and other legal proceedings to complain that a public authority has violated a Convention right, but only if they are “victims” of that violation. The victim standing test was adopted from the Strasbourg institutions without any consideration being given in Parliament to the appropriateness of such a test in the domestic context. It is argued that the suitability of a particular standing rule for a given jurisdiction cannot properly be evaluated until a theory explaining the juristic function of standing rules has been identified and articulated. Two theoretical aspects of standing rules in public law cases are suggested here, in order to provide a framework in which to assess the appropriateness of the victim test for judicial review cases raising Human Rights Act arguments.

An Agency Cost Analysis of the Wrongful Trading Provisions: Redistribution, Perverse Incentives, and the Creditors’ Bargain

Abstract: Previous work on the wrongful trading provisions of the Insolvency Act 1986 (s. 214) has been content with description, or with statutory construction. This paper employs the tools of agency theory and the creditors' bargain heuristic to analyse the need for these provisions, their structure, role, and effect. It examines why those interested in the company's undertaking would demand and accept a s. 214-type duty. The analysis reveals that the duty would not be equally relevant for all types of companies, and that the influence of the market for managerial labour ensures most s. 214 actions are likely to be brought against directors of closely-held companies, and against shadow directors. The analysis, by pointing out that security plays a role similar to s. 214 itself, also justifies a recent Court of Appeal decision which precludes secured creditors from any recoveries under that section. Finally, the incentives created by the provisions for the managers of both healthy and distressed companies are examined. It is suggested that these incentives are generally socially efficient.

The “disguised” Vertical Direct Effect of Directives?

Abstract: This paper addresses one aspect of the European Court of Justice’s troubled case-law on the direct effect of Community directives: the so-called “incidental effect” of unimplemented directives against private parties, and its uncomfortable relationship to the basic framework of legal principles so forcefully affirmed by the Court in Faccini Dori [1994] E.C.R. I-3325. It is argued that the judgments in question can perhaps best be understood as some form of “disguised” vertical direct effect, but that any such solution merely reinforces the unsatisfactory policy quandary which besets this area of Community law.

Rescission as a Self-Help Remedy: A Critical Analysis

Abstract: Rescission (the process by which a voidable contract or other disposition is avoided) is frequently described as a remedy which can be effected both by judicial decree and by the act of the innocent party. This article seeks to explore the latter notion, that it is possible to rescind a contract or disposition by self-help means. It explains that the law is in some disarray, caused primarily by confusion between the dual historical development of rescission at law and in equity. Rescission was traditionally regarded as the act of the innocent party only for vitiating factors (such as fraud) actionable at common law, not those actionable in equity, but this separation was not maintained following the Judicature Acts. Moreover, there are practical and conceptual difficulties with the notion of rescission as a self-help remedy, both in the idea that rescission can be effected by the election of the innocent party without judicial intervention and that, even where judicial rescission is obtained, the court order is back-dated to the earlier date of the innocent party’s election. The principal difficulty arises when an executed or partly executed transaction is rescinded, for then there are restitutionary implications and implications for the security of third party title. The conclusion is that the notion of rescission as a self-help remedy serves only to confuse in the modern law of obligations and should be abandoned.

Funding “sex-change” operations

Abstract: A C ASE which will be of interest to students of medical law, public law and human rights, North West Lancashire Health Authority v. A, D, & G [1999] Lloyd's Rep. Med. 399, concerned three transsexuals who wanted “sex-change” operations. The health authority's policy was to give low funding priority to procedures it considered of little or no clinical benefit; the authority would not fund “gender reassignment” except in cases of “overriding clinical need” or other exceptional circumstances, though it would fund psychotherapy.

Judicial Style and Judicial Reasoning in England and Germany

Abstract: The author finds the English judicial style and technique more informative than the German and argues that German jurists, be they academic or practitioners, would derive some benefit by studying how the English judges craft their judgments. However, English judges would stand to benefit by looking at German substantive law and its techniques of keeping litigation under control.

Public authority negligence revisited

Abstract: Following on from earlier consideration of this issue by the same authors in the 1980s, this article examines the principles governing the negligence liability of public authorities as articulated in recent cases, and in particular the decisions of the House of Lords in X v. Bedfordshire, Stovin v. Wise and Barrett v. Enfield London Borough Council. It concludes that the various attempts to establish special principles to govern such liability have been misguided, and that the courts have proved too willing to reject claims on the basis of questionable policy considerations, to the extent that a blanket immunity might appear to have been established in some contexts. Ultimately, this approach has brought the United Kingdom into conflict with its obligations under the European Convention on Human Rights. It is argued that ordinary private law principles provide a wholly appropriate basis for reconciling the legitimate interests of public authorities with the need to accord justice to individual litigants.

Human Rights: implications for labour law

Abstract: The author considers the potential of the Human Rights Act to influence the future of labour law. First, the development of common law can be based on fundamental human rights principles. Statutory interpretation of employment legislation can also be grounded on this potentially more principled approach. Second, the new legislation may hasten the development of a common law of privacy and provide greater protection for expression of political and religious views in the employment context. Third, it changes the criteria against which the propriety of restrictions in the employment relationship should be judged. It is likely that in judicial review cases the more rigorous proportionality standard rather than the Wednesbury unreasonableness test will be used. Finally, the effective application of human rights in the private sphere is likely since the Convention case-law, the debates in Parliament and the Act itself strongly suggest that the Convention rights will have an indirect effect. The domestic courts must take the opportunity to develop their own human rights standards.

Collective dominance: a mechanism for the control of oligopolistic markets?

Abstract: IN Gencor v. Commission (Case T-102/96, judgment of 25 March 1999, not yet reported) the Court of First Instance of the European Communities favoured a bold construction of the jurisdiction of the Commission and of the concept of joint dominance in merger cases. The judgment is also likely to have implications beyond the context of mergers for the use of Article 82 EC to control oligopolies. The case concerned the proposed merger of the platinum and rhodium operations of Gencor, a South African company, and of Lonrho, a company incorporated under English law. In particular, Gencor and Lonrho sought to acquire joint control of Implats, the South African company that brought together Gencor's activities in the platinum and rhodium sector, and through Implats, of the two South African companies that brought together Lonrho's activities in the same sector. The arrangements were notified to the South African competition authorities and to the EC Commission. The South African authorities did not oppose the merger. The Commission, however, issued a decision (Commission Decision 97/26/EC (O.J. 1997 L 11/30)) pursuant to the EC Merger Regulation (Council Regulation 4064/89 (O.J. [1989] L 395/1)) declaring that the proposed concentration was incompatible with the Common Market because it would lead to the creation of a collective dominant position between the entity arising from the concentration and Amplats, the leading world-wide supplier of platinum metal. Gencor challenged the decision of the Commission before the Court of First Instance.

Wills Made in Suspicious Circumstances: the Problem of the Vulnerable Testator

Abstract: English law provides inadequate protection for vulnerable testators, a growing class. Those thinking of challenging suspicious wills are deterred by the cost and poor prospects of success. Traditionally, probate lawyers have been reluctant, when challenging wills, to allege misconduct and the leading case of White v. Nye has caused general confusion by attempting to disguise a plea of fraud as though it were a plea of lack of knowledge and approval.

On the Nature of Legal Rights

Abstract: This article seeks to uphold the Interest Theory of legal rights by arguing that such a theory can withstand objections and handle difficulties that are often posed against it. Building on the author’s previous defences of the Interest Theory, the present article also seeks to expose some serious shortcomings in competing theories. Among the topics covered are the role of legal powers of enforcing or waiving legal rights; the possibility of rights to be mistreated; and the status of inoperative rights. In each case, so the article argues, the complexities of the issues involved can best be handled by a theory which maintains that the essential function of legal rights is the protection of various aspects of people’s well-being.

Bankers’ references and the bank’s duty of confidentiality: when practice does not make perfect

Abstract: I T is a well-established principle that banking practice will be taken into account by the courts. The principle makes good sense when examining the rights and duties which arise between the banks themselves, for they are the very architects of such practice. It is open to closer scrutiny when banking practice is relied on to mould the relationship between a bank and its customer who has no control over, and may be totally unaware of, the relevant practice. To say, as Willes J. did in Hare v. Henty (1861) 10 C.B.N.S. 65, 77, that “[a] man who employs a banker is bound by the usage of bankers” is potentially misleading. This half-truth was recently exposed by the Court of Appeal in Turner v. Royal Bank of Scotland plc [1999] 2 All E.R. (Comm) 664, where it was held that a bank could not rely on banking practice to imply its customer's consent to the use by the bank of confidential information in order to give other banks references about his creditworthiness.

Human rights in the House of Lords: what standard of review?

Abstract: T HE applicants in R. v. Secretary of State for the Home Department, ex p. Simms [1999] 3 W.L.R. 328 were convicted murderers whose applications for leave to appeal had been refused but who continued to protest their innocence. To this end they gave interviews to investigative journalists, hoping that this would ultimately result in their cases being referred back to the Court of Appeal. However, paragraph 37 of the Prison Rules 1964 provides that professional visits by journalists to prisoners should not generally be allowed and that any journalist wishing to visit a prisoner qua relative or friend must undertake not to publish anything disclosed during the visit. Paragraph 37A stipulates that if, exceptionally, a journalist is permitted to make a professional visit, he must undertake to abide by any conditions prescribed by the prison governor. In the instant case the prison authorities, pursuant to a Home Office policy directing prison governors to impose a blanket ban on all visits by journalists in their professional capacity, refused to permit further visits unless paragraph 37 undertakings were forthcoming. Their Lordships accepted the applicants' argument that this constituted unlawful interference with their entitlement to free expression.

"Heard it Through the Grapevine": Chinese Walls and Former Client Confidentiality in Law Firms

Abstract: Since the mid-1980s the UK's legal profession has been in the grip of a transformation in the form of law firm mergers which shows no signs of abating.1 Although there is a dearth of serious literature explaining the exact rationale for these mergers,2 it is nevertheless widely believed that they will generate economies of scale and scope and, more importantly, help ensure that UK firms are equipped with the expertise necessary to handle complex transactions on a global scale. Yet while law firm mergers may bring certain benefits, they also bring costs, one aspect of which is former client confidentiality.3 The trend towards merger has exacerbated this problem and has focused attention on the means by which former client confidences are to be maintained. One popular method used by many firms is the Chinese wall,4 a mechanism designed to stem the flow of confidential information between firms or between

Naming and Shaming Young Offenders

Abstract: In the criminal justice system’s scheme of unpleasant things, what official part is played by “naming and shaming” the offender?

Trust property and unjust enrichment: tracing into the proceeds of life insurance policies

Abstract: FOSKETT v. McKeown [2000] 2 W.L.R. 1299 concerned the aftermath of a property development scheme in the Algarve marketed by one Mr. Murphy. 220 customers (“the purchasers”) entered into contracts which provided that after two years they would each be conveyed a specified plot of land or their money would be repaid with interest. Unless and until the purchasers’ money was used for the stated purposes it was to be held on trust. However, at the expiration of the specified period, it was discovered that the trust money had been misappropriated. While much of the trust money was untraceable, Murphy had applied around £20,000 of it to pay the fourth and fifth premiums of a life insurance policy that was settled in favour of his wife and children (“the beneficiaries”). In 1991, after his malfeasance was exposed, Murphy committed suicide. The insurance policy yielded a death benefit of £1,000,000. The question to be resolved was whether the use of the purchasers’ money to pay some of the premiums gave them any interest in the death benefit.

Fleeting Mental States

Abstract: The philosophical concept of acting intentionally does not entail a perceptible time gap between intention and action. We may say of a person who acts on the spur of the moment that their action was intended or intentional; but in such circumstances, intention and action may seem to merge in a way that makes it difficult to disentangle the mental and physical elements of the person's conduct. The author argues that in this context the tools and techniques used by philosophers of mind and action may not provide us with the best understanding of the social practices of blaming found in the criminal law.

Legitimate expectation: the substantive dimension

Abstract: The need to redress the inequality of power between the citizen and the State, which lies at the heart of public law, is illustrated nowhere more clearly than in the facts of R. v. North and East Devon Health Authority, ex p. Coughlan [2000] 2 W.L.R. 622. As a result of her severe disability Pamela Coughlan was, for many years, looked after as a hospital in-patient. In 1993, however, she agreed to move to a purpose-built care facility on the strength of the respondent’s promise that it would be her “home for life”; yet, only five years later, the health authority decided to close the new home, citing financial reasons. That the applicant possessed a legitimate expectation which would be breached by closure of the home was not in doubt. The difficult question was how the expectation could be protected. Courts have long been willing to enforce procedural promises and to safeguard expectations of substantive benefits by requiring the adoption of a fair procedure (typically consultation) before the benefit is denied. Coughlan, however, makes it clear that courts may go further than this by substantively protecting substantive expectations.

How Knowing is Knowing Receipt

Abstract: Directors of BCCI (Overseas) Ltd. deliberately applied its funds in breach of their duties, and Chief Akindele received those funds. Later, the company, acting by its liquidator, sued Chief Akindele both for knowing receipt of the misapplied funds and for dishonestly assisting their misapplication. The High Court dismissed the claim for dishonest assistance: the company could not prove that Chief Akindele had been dishonest. There was no appeal against this ruling. So at the very beginning of his judgment in BCCI (Overseas) Ltd. v. Akindele [2000] 4 All E.R. 221, which was the only reasoned judgment given in the Court of Appeal, Nourse L.J. stated the key remaining question about the claim for knowing receipt: “What must be the recipient’s state of knowledge? Must he be dishonest?”

Cheating the Public Revenue

Abstract: The line between legitimate tax mitigation and illegitimate tax evasion may be a fine one but if it is crossed the consequences can be serious, since tax evasion can constitute the common law offence of cheating the public revenue. The nature of this offence was considered by the Court of Appeal in R. v. Dimsey; R. v. Allen [1999] S.T.C. 846.

Negligent Inspectors and Flying Machines

Abstract: This article examines how courts determine whether proximity exists as between parties to a dispute in the “borderland” between two categories of negligence, viz. that concerning acts which cause physical harm and that concerning misstatements which cause pure economic losses. It is argued that these case categories cannot be delineated as neatly as the courts have assumed and that the kind of proximity typical of each is likely to be founded upon, at minimum, the presence of a close causal connection between ‘action’ and damage. In light of these findings, the article also considers the place of the notion of ‘directness’ in the tort of negligence.

A new system of civil appeals and a new set of problems

Abstract: THE decision itself in Tanfern Ltd . v. Cameron-MacDonald [2000] 1 W.L.R. 1311 (C.A.) hardly merits attention (held: the court lacked jurisdiction to hear the instant appeal). But Brooke L.J.’s judgment, endorsed by his colleagues, contains an analysis of the new system of civil appeals which took effect on 2 May 2000. He rightly describes these as “the most significant changes in the arrangements for appeals in civil proceedings in this country for over 125 years”.

A Duty to give Reasons

Abstract: In Flannery v. Halifax Estate Agencies Ltd. [2000] 1 W.L.R. 377, the purchasers of a flat in Manchester sued a valuer, on whose report they had relied, for negligence. At the trial there was a conflict of expert evidence. The judge preferred the evidence of the defendant's experts and dismissed the claim. It was accepted that the judge's conclusion was one that was open to him on the evidence. The Court of Appeal set aside the judgment and ordered a new trial.

Mortgagees and receivers—a duty of care resurrected and extended

Abstract: When a chargee (a term which we can take for present purposes to include a mortgagee) appoints a receiver or takes other steps to enforce his security, the general rule is that self-interest prevails, so that neither he nor his receiver is required by the law to have any great concern for the interests of the chargor or any other person interested in the equity of redemption (such as the holder of a junior-ranking security) or a guarantor of the chargor's obligations. This is well illustrated by Shamji v. Johnson Matthey Bankers Ltd. [1991] B.C.L.C. 36, C.A. (a chargee is under no duty towards the chargor in deciding whether to appoint a receiver), and Gomba Holdings U.K. Ltd. v. Homan [1986] 1 W.L.R. 1301 (a receiver's duty of confidentiality vis-a-vis the chargee prevails over his duty to give information to the chargor).

Admitting acquittals as similar fact evidence of guilt

Abstract: AN accused is charged with rape. He will claim that the complainant consented. The Crown can prove that on four previous occasions that selfsame accused has been tried on other counts of rape, but on all but one of them has been acquitted. The trial judge rules that, had the accused been convicted of all four earlier rapes, such evidence would have been admissible at the fifth trial under the similar fact evidence principles enunciated by the House of Lords in D.P.P. v. P [1991] 2 A.C. 447. The single earlier conviction, however, standing alone, does not qualify as admissible similar fact evidence. These, in essence, were the facts confronting the House of Lords in R. v. Z [2000] 3 W.L.R. 117, the general question for the House being: despite three of Z’s previous trials having resulted in acquittals, was the Crown entitled to lead evidence of all four earlier incidents, including testimony from the three complainants whose allegations had failed to persuade juries in the past?

The Rule Against Perpetuities and the Law Commission’s Flawed Philosophy

Abstract: The author considers the proposal of the Law Commission that the Rule against Perpetuities should be amended rather than abolished and emphasises the need for a balance between the freedom of the current generation and the freedom of future generations to control property. The article draws attention to the experience of Canada and the United States and suggests that experience undermines the Rule's economic rationale and that the Law Commission should consider recommending the Rule's abolition.