Lord Justice Jackson Criticises Failure to Grasp Skeleton Arguments

Lord Justice Jackson has criticised the legal industry for a continued failure to grasp the need for better skeleton arguments. He said that the need idea was “not rocket science” but that legal professionals were consistently failing to grasp its importance and implement improvements.

Through a Court of Appeal judgement, Jackson took the opportunity to “speak more bluntly” on the issue. In particular, he criticised the way some of the skeleton arguments seen in the upper levels of the court system displayed “poor quality and excessive length.”

The judgement in question related to a case where it was being decided whether a defendant should be committed for contempt of court. The appellant, according to Jackson, produced “35 pages of rambling prolixity.” This, he said, made it extremely difficult to distil the facts and important points from the argument.

Jackson went on to say that “A good skeleton argument (of which we receive many) is a real help to judges when they are pre-reading the (usually voluminous) bundles. A bad skeleton argument simply adds to the paper jungle through which judges must hack their way in an effort to identify the issues and the competing arguments.”

A good skeleton argument, he said, “just requires a few minutes’ clear thought and planning before you start.” Jackson noted that the court of appeal had sometimes deprived certain parties of the costs of skeleton argument preparation, but said that it was no longer sufficient to just issue minor rebukes for poor quality skeletons.

Jackson went on to provide some suggestions for the preparation of a good skeleton argument. He said that such an argument should be designed to provide judges with a “concise, user-friendly introduction” to the relevant issues, arguments and facts of the case. This should be done with cross-referencing to other relevant documents or authorities.

In terms of length, Jackson suggested that usually a skeleton prepared by an appellant should not exceed 25 pages, and usually it should be significantly shorter.

Jackson is not an entirely uncontroversial figure within the legal industry. He has issued many suggestions for reforms or improvements which have not always proved popular across the board. In particular, he carried out a review of civil litigation and this contained a number of controversial proposals as well as many well-received ones. These were later implemented somewhat selectively by the government, particularly those relating to the even more controversial legal aid reforms.

Senior Judge Calls for Family Court Reforms

Family Division president and High Court judge Sir James Munby (right) has called for “radical” reforms of the family court system. This call forms part of the ongoing and high-profile discussion surrounding the impact of legal aid cuts on the family court, with Munby suggesting that overhauling the system would help to somewhat mitigate the negative impact of these cuts.

The cuts to legal aid, removing it from the larger part of family court cases, have resulted in a huge increase in the number of people appearing without any legal representation. Munby suggested that parties appearing without representation is now the “reality” of the family courts, and that the system must be adjusted in order to reflect this.

Speaking to the Legal Wales Conference last week in Bangor, Munby also suggested that a radical overhaul of the divorce process could be needed. Not for the first time, Munby suggested the introduction of a no-fault divorce system – something which does not truly exist in the British system but is seen in some other jurisdictions around the world. In fact, Munby suggested that the concept of fault could be removed from the divorce process entirely, leaving irretrievable breakdown as the sole basis for divorce.

Munby also suggested that the process of obtaining a divorce and the matter of seeking financial relief afterwards could be separated into two separate processes. On this subject, he asked “May the time not come when we should at least consider whether the process of divorce still needs to be subject to judicial supervision?”

Summarising the reasoning behind these suggestions, aside from reflecting the difficulties the current process creates for those who cannot afford legal representation, he said that the family justice system should aim to “simplify and streamline” processes. This would make them more pleasant for those involved, more accessible to litigants in person, and cheaper on the whole.

Furthermore, Munby criticised the “injustice” that currently exists in the fact that family courts do not afford the same rights and treatment to cohabiting couples as they do to married couples. When it comes to redistribution of assets, he claimed, the two types of couple should be treated more equally than they currently are.

Summarising his call for an overhaul, Munby said “Reform is desperately needed – has been desperately needed for at least 40 years… Thus far governments have failed to act. Reform is inevitable. It is inconceivable that society will not right this injustice in due course.”

Legal Industry Growth Approaches Pre-Recession Levels

The UK legal services market is showing growth that approaches the levels seen before the recession hit. The industry is now forecast to once again reach 2008 levels next year, according to the latest predictions from the Law Society.

The latest forecasts for the legal services market predict that turnover will experience total growth of 3.8% in real terms through 2014. This compares to growth levels of 3.5% through 2013 and a mere 1.5% over the course of 2012. In 2015, growth in real turnover is expected to leap significantly to a level of 4.9%.

Growth in net exports, which has been affected by changes to the strength of the pound, is expected to show stand at 3% this year. Next year, it is expected to hit levels of 7.9%, a significant increase. Both the emerging and advanced economies are expected to play a key role in driving this acceleration.

This year so far has seen significantly improved performance for both the housing market and the business sector within the UK, and these are both believed to be important driving forces behind increasing growth in the legal industry. According to the Law Society, this trend is expected to continue for the remainder of 2014 and throughout 2015.

According to Andrew Caplen, president of the Law Society, “If household incomes rise as predicted, our members with clients buying and selling property or needing legal advice for their businesses will benefit from housing market and business activity,”

Caplen also said that “High export predictions for 2015 will be welcomed by firms of all sizes having a role in meeting the increased demand for international transactions.”

However, the Law Society emphasised that a degree of caution should still be exercised in interpreting these figures. They are largely based on predictions relating to the average income of UK households in real terms. Specifically, real income is expected to exhibit growth of 2% this year. In 2015, growth in household income in real terms is expected to increase by almost half, reaching levels of 2.9%. Since these forecasts play such a significant role in the Society’s forecasts for the legal industry, any differences between the predicted levels and real-life growth could in turn have a significant impact on the performance of the legal industry. If household incomes fail to grow as expected through this year and next year, this would also mean that the legal industry likely will not experience the level of growth that the Society forecasts.

Settling out of Court- the F1 way

In the UK, litigants are encouraged strongly, by both courts and lawyers, to settle prior to any court hearing. It is standard practice, and very much recommended, for any number of reasons. The best legal outcome is when both sides reach an agreement over the matter in dispute without recourse to the formalities and uncertainties of a court hearing.

Such good advice stretches beyond the UK legal jurisdiction, and beyond the average family or civil matter.

In a German court recently, F1 supremo Bernie Ecclestone recently settled a multi-million pound dispute out of court. Mr Ecclestone, 83, was accused of bribery and corruption regarding a partial F1 sale in Germany several years ago. In April he was accused of paying Gerhard Gribkowsky, a banker at BayernLB, $44m in order that a company Mr Ecclestone favoured would be able to buy a stake in F1. As such, Mr Ecclestone would still be in total control of his F1 empire. Mr Ecclestone has denied the allegations, claiming that he made the payment to Mr Gribkowsky after he threatened to make false allegations regarding the F1 chief’s tax status.

After several months of hearings, the trial was ended in early August. The German civil code allows for trials to be ended upon a making a payment to the court authorities, if the court deems it appropriate given the case and other factors, and agrees to such a measure. This provision exists to ease the burden on the courts, and to deal with cases where a clear verdict might be difficult to arrive at.

Presiding over the Munich court, Judge Peter Noll agreed to end the trial for a payment of $100m; $99m would be given to the Bavarian state treasury, with $1m to children’s hospital. With Forbes placing his wealth recently at $4.2bn (the 12th richest UK billionaire), such a sum is easily affordable for Mr Ecclestone.

As a result, the trial was terminated under German law. Mr Ecclestone was found neither guilty nor innocent, and (crucially) can continue to run F1. Mr Gribkowsky, however, was sentenced to eight and half years in prison for his part in the bribery.

Although perfectly legal, the agreement has attracted some criticism. Writing on the Spiegelonline website, lawyer Franz Bielefeldwrote that it was unusual for the provison to be used half way through proceedings; usually it is invoked at the start of a trial. Further, former politician Sabine Leutheusser-Schnarrenberger criticised the use of the provision, stating that it allowed the rich to go free, and left those not able to afford such payments facing prison. According the former Justice Secretary, it was “not just bad taste – it’s really insolent”.

Bernie Ecclestone, his lawyers- and a very good legal settlement

However, such a (mid) trial agreement was not a total victory for the F1 supremo. In separate hearings, an offer of $34m to end proceedings brought by the bank in question was rejected. Public sector bank BayernLB claims that Mr Ecclestone undervalued its stake in F1 (which it sold in 2005) and collected commissions. With the rejection of the offer, the bank could launch further proceedings, or negotiate another offer.

Although settling out of court prior to any hearings (or, in Mr Ecclestone’s case, half way through the trial) is ideal, and recommended here in the UK, sometimes the consequences can be slightly bizarre, perhaps slightly one sided or unfair, and not totally in the best interests of natural justice.

A trial, with both sides setting forward their case and arguments, and all the facts being discussed in open court, is undoubtedly the best way to settle a legal dispute morally. Practically, however, such drawn out, costly, emotive and time consuming proceedings can be avoided by reaching a settlement prior to any hearing. Whatever the benefits of that, the party with the dominant position (or more money) is often in a position to dictate terms, or to heavily influence any negotiations. It is for each party to weigh up the morality and justice of a trial, with the unfair practicalities of a settlement.

Of such is the nature of UK law; legality and fairness and morality and ethics do not necessarily go together in the legal world.


Cox v Ergo Versicherung AG: a lesson in jurisdiction

How far does the rule of UK law reach? That simple question has been considered and discussed by legal scholars and judges in many previous cases, with interesting answers (sometimes contradictory). In the recent case of Cox v Ergo Versicherung AG (formerly known as Victoria), the Supreme Court added more to that ongoing discussion.

The case concerned the unfortunate matter of Major Christopher Cox. Whilst stationed with the British Army in Germany, he was run over whilst on his bike just outside his base. He later died from the injuries he received. His widow moved back to the UK (where for all intents and purposes they had been living throughout his Army career), eventually remarrying and having two children with her new husband. However, she was still pursuing the driver of the car that killed Major Cox, Herr Gunther Kretschmer, for damages.

From the outset, liability was never an issue. It was found early on that Herr Kretschmer was responsible and culpable for the accident. His insurers also accepted the fact of Herr Kretschmer’s liability, and were prepared to pay damages to the victim’s widow. Despite the great consensus from both parties throughout the case, there was one issue which complicated matters,and which ensured that the case made its laborious way through the legal system for 10 years.

That issue was, essentially, one of jurisdiction.  Jurisdiction is essentially where a legal matter occurred; under what nation’s legal system would a case he heard, tried and judged? In international law, or in matters of international trade or shipping, that answer is never, ever easy, and establishing the simple matter of jurisdiction can take on a life of its own, eclipsing the actual case at hand.  In the case of  Cox v Ergo Versicherung AG, the issue was whether the former Mrs Cox should be awarded damages in line with UK law, or German law.

Under the terms of the UK Fatal Accidents Act (1976), she was entitled to be compensated “in proportion to her loss”, and any subsequent marriage is to be disregarded when awarding damages. Indeed, the Court also had to consider whether her damages might fall under any other legislation or case law.  By contrast, the German Civil Code, known as the BGB, is less generous. Under s.844, essentially the widower would have to be compensated with the intent of restoring her to the financial position she would have been in had the accident not happened. Such proportionality and sense of restitution is a hallmark of the BGB, and the German legal system. The question before the five Supreme Court judges was which legal system should damages be awarded under.

Giving the leading speech, Lord Sumption sums up the case history to date and the relevant legislation. The Court of Appeal had ruled that the UK courts should apply the German legal code in this instance; that was appealed. At paragraph 12 he begins to weigh both arguments up.  Aside from the provisions of the 1976 Act, Lord Sumption also considered the provisions of the  Private International Law (Miscellaneous Provisions) Act 1995. The provisions of those Acts aside, it is eventually established conclusively at paragraph 20 that:

“[The relevant] provisions [of the 1976 Act] do not lay down general rules of English law relating to the assessment of damages, even in personal injury actions, but only rules applicable to actions under the Act itself. Sections 1A, 3(3), 3(4) and 4, which include the provisions relevant to the present appeal, apply only to “an action under this Act”, i.e. to actions brought under section 1. The context shows that the same is true of the other provisions of section 3 (“in the action”). An action to enforce a liability whose applicable substantive law is German law is not an action under section 1 of the Fatal Accidents Act.”

With that firmly established, the rest of the case, and the verdict, falls into place. If the matter does not fall under the 1976 Act, and is neither covered by the 1995 Act, then virtually by default, the principles of the German BGB need to be applied. At 22, one difficulty is raised, and skilfully overcome; namely, the widow’s remarriage, and her receipt of maintenance from her new husband prior to there being any legal obligation for him to do so. In a dense, complicated but skilfully argued chain of legal reasoning, Lord Sumption expertly overcomes this barrier, finding that:

“Purely voluntary payments from someone with no legal obligation to make them cannot be regarded as an alternative to what she has lost. It follows that credit need not be given for it.”

The matter of jurisdiction and the extra territorial application of UK law is raised- and easily dismissed. Although admittedly there are some grounds for UK law to be applied in this case, Lord Sumption navigates around this skilfully. Indeed, he points out at 29 that (essentially and by implication) the matter of the supremacy of the BGB has already been established in lower courts. After applying the relevant case law to the matter under discussion, he still comes to the same conclusion- albeit admitting that in many instances UK law would take supremacy in a similar case abroad.

Despite that, Lord Sumption readily agrees with the lower court- although he comes to the same conclusion by a different method. In a concurring judgement, Lord Mance also reaches the same conclusion- again by a different series of legal reasoning. Mrs Cox’s appeal is overturned- and she was awarded damages in line with the German BGB.

Although concerned with damages, and civil law, Cox v Ergo Versicherung AG raises interesting points of private international law, and jurisdiction. Although ruling that UK law does not apply in this particular matter, the case leaves the door wide open for similar cases involving British citizens (or perhaps property) to be heard under UK law abroad.

Lord Sumption (supported by Lord Mance) refers particularly to the construction of the 1976 and 1995 Acts, and relies heavily on the 2006 case of Lawson v Serco Ltd. Although it is automatically presumed that UK law cannot be readily applied abroad, the construction of the relevant legislation allows that to be the case if the matter at hand has substantive UK ties.  Lord Sumption goes to great length to deny the extra territorial application of the 1976 Act- but does not conclusively state that it  can never happen.

In the matter of private international law, and settling UK related disputes abroad, Lord Sumption delivers a skilful, surgical and detailed blow to that. Despite dismissing such extra territorial claims, he does not conclusively rule against such claims ever being allowed. As such, Lord Sumption is (more by accident than design) maintaining the legal status quo, in keeping the possibility of such cases being successful open, while emphatically dismissing this particular claim. Whilst seeming to be bold and decisive, Lord Sumption is actually being legally cautious. That is surprising, as it is normally Lord Neuberger (very quiet in this case) who is the cautious member of the Supreme Court, not Lord Sumption.

New Forced Marriage Laws Take Effect

New laws have now taken effect in England and Wales making it a specific offence to force somebody into a marriage. Campaigners have said that this offence sends “a powerful message.”

Parents who force their children into a marriage against their will could face punishments of up to seven years imprisonment. Beforehand, civil orders to prevent forced marriages were the only tools in courts’ hands for the protection of victims.

The government dealt with well over a thousand separate cases last year. 2013 saw the Forced Marriage Unit deal with 1,302 cases in all. In 82% of these cases, the victims were female, and the remaining 18% involved male victims. 15% of all victims were under the age of 15.

The new laws come under the Anti-social Behaviour, Crime and Policing Act 2014. They will not only protect people forced into marriage in England and Wales, but also UK nationals who face the risk of being forced into marriages abroad. According to ministers, the law will protect thousands of people every year and also boost victims’ confidence and encourage them to come forward.

According to Theresa May, Home Secretary, forced marriage is “a tragedy for each and every victim.” May said that criminalising the practice represented “a further move by the government to ensure victims are protected by the law and that they have the confidence, safety and the freedom to choose.”

Meanwhile, Jasvinder Sanghera, founder of the charity Karma Nirvana, called the criminalisation of forced marriage a “historical day and the right move.” She went on to stress the importance of victims coming forward to report what they had been through. Sanghera emphasised that “nobody is going to be forcing you to prosecute or criminalise your parents. Reporting is the first thing you have to do and it will be your choice to pursue a criminal justice process.”

The law has also made it a criminal offence to breach a forced marriage protection order, an order that courts can issue to prevent forced marriages from going ahead. Acting against such an order now carries a maximum sentence of five years’ imprisonment.

The definition given of a forced marriage is “one in which one or both spouses do not consent to the marriage but are coerced into it.” Such coercion may take the form of “physical, psychological, financial, sexual and emotional pressure.” A marriage may also be defined as forced without coercion being involved “in the cases of vulnerable adults who lack the capacity to consent to marriage.”

Greater Powers for Magistrates – Less Justice for Claimants?

The Legal Aid, Sentencing and Punishment of Offenders Act (2012) (LASPO) has been much criticised for its swinging cuts to legal aid. However, legal aid cuts were only a part of the controversial Bill.

A large part of LASPO dealt with changes to court procedures, CFA (conditional fee agreements, or ‘no win, no fee’ agreements), and other similar matters. A few clauses of the Bill were also able to grant magistrates greater powers, if activated.

Under the provisions of LASPO, the government had the power to grant magistrates greater powers, such as imposing higher levels of fines, and harsher sentences if applicable. It is only now, however, that the government is choosing to exercise those clauses, and to go ahead with that. As such magistrates are being given, amongst other powers, the ability to impose higher levels of fines.

The sentence for minor offences and misdemeanours is mostly a fine- but magistrates can impose prison sentences of up to six months, or up to 12 months for more than one offence. Figures indicate that magistrates are seemingly reluctant to impose custodial sentences, reducing their use of prison sentences by up to a quarter between 2001 (4.9% of cases ended up in custodial sentences) and 2011 (3.8% of cases were awarded custodial sentences). The Ministry of Justice (MoJ) said of the proposals that custodial sentences would “continue to be used for serious offenders and fines will not become an alternative for those who would otherwise be sent to custody”.

Currently, any fines imposed by magistrates are set according to a series of specific maximums (or level) according to the offence, and the nature of the particular offence. Those levels range from £200 to £5,000, with some offences (e.g. environmental offences) carrying a higher fine. Effectively, magistrates’ fines would rise by up to 300%.

Under proposals set out recently by Justice Minister Jeremy Wright, such levels could rise to £10,000. Further, offences currently incurring a fine of £5,000 could be subject to an unlimited fine before magistrates.

Under the proposals, Level 1 fines could set at a maximum of £800 (currently £200), and would be awarded for offences such as unauthorised cycling. Current Level 2 fines are capped at a maximum of £500; that would rise to a maximum of £2,000 and would be awarded for offences including not wearing a motorcycle helmet whilst driving a motorcycle. For Level 3 fines, the new maximum would be £4,000 (up from £1,000), and would cover offences such as drunk and disorderly behaviour, and selling alcohol to someone who is drunk. Level 4 offences, such as motorway speeding, would see the maximum fine rising from £2,500 to £10,000.

In setting out these proposals, the Justice Minister said of magistrates that they “are the cornerstone of our justice system and these changes will provide them with greater powers to deal with the day-to-day offences that impact their local communities…” He went on to say that “[fines] set at the right level” were an effective punishment and deterrent.

Given that it is driving offences that will be greatly affected, many drivers’ pressure groups are in support. James McLoughlin, spokesman for road safety charity Brake, said in support that “speed is one of the biggest killers on our roads and, through the support we provide for victims of road crashes, we bear witness to the devastating effects of speeding…Limits are there for a reason, and more needs to be done to deter those who choose to put other road users at risk by breaking them.”

There is opposition to the proposals, inevitably. A key constitutional concept is that government cannot interfere with magistrates and judges as regards sentencing. There have been many political and legal battles fought over the centuries as regards this point; the government has yet to have a conclusive victory in this regard. Critics also argue that there is no good reason for the current to system to be changed, as there is nothing to fault about the current system. Additionally, as regards road traffic cases, there has been a decline in such cases going before magistrates courts. Another issues raised has been that severe fines could make household poverty and finances worse if convicted of a minor crime at a time of increasing pressure on household budgets.

Magistrates 2.0: to be given greater powers?

Magistrates 2.0: to be given greater powers?

At this stage, Jeremy Wright’s proposals still need to be debated by Parliament, and then go through the laborious process to become law. Currently, there is no time allocated in the next Parliamentary calendar for such a debate. This is very much a series of proposals- at this stage.

A point to be considered is that, in these harsh economic times of government deficits and cutbacks, figures show that the MoJ collected record fines last years. In the fiscal year 2012/ 2013, fines collected by magistrates totalled a record £248m. That number has continued to rise over the last year. Such proposals would only see the amount collected in fines by the MoJ rise even further.

The provisions of such alterations would be initiated by clauses in the infamous LASPO. A part of that set out deep cuts to legal aid, in what was seen as a short sighted, undemocratic, cost cutting measure. The irony here is that while that part of LASPO denies money and support to claimants and related parties, other parts of the same Bill grant the government the ability to raise more money.

Despite that, Justice Secretary Chris Grayling still denies strongly that LASPO was a cost cutting and money saving measure.

Peace still elusive in Northern Ireland

Following on from the Queen’s historic state visit to Ireland in 2011, President Michael D Higgins of the Republic of Ireland visited the UK in early April, in a formal state visit. He was hosted by the Queen at Windsor Castle, with a state banquet being held in his honour. During his state visit, he met both the Prime Minister and Deputy Prime Minister at Buckingham Palace. His visit also took in Coventry and, on the last day, a rather more personal visit (but no less formal) to Stratford upon Avon. Here, the well-known poet and author, and his actress wife, visited the RSC, and were warmly received.

After all the events and pomp that surrounds such a state visit, diplomats, politicians and journalists alike have all praised President Higgins’ visit. Both his visit, and the Queen’s 2011 visit, have been seen as a resounding success, politically and diplomatically. In addition, such a formal exchange of visits goes to show that the ties between Ireland and Britain remain as strong as ever, despite the turbulent events of the 20th century, and the strained relationship between the two nations previously

It is to be hoped that such positive and very public acts of diplomacy can go a long way to healing the rift arising from the past atrocities committed by both nations against the other. However, for that to happen, both sides have to forgive the other for past events, and to seek a peaceful future, rather than continued strife. In that way, all the human rights abuses by both sides of the Troubles, and in conflicts prior to that, can be left firmly in the past.

The state visits are but part of several decades of careful diplomacy between Ireland and the UK over the Northern Ireland question. The visit goes to show just how far both sides have come since the atrocities and human rights abuses prior to the Good Friday Agreement.

The Queen and President Higgins on his state visit; progress for a lasting peace

The Queen and President Higgins on his state visit; progress for a lasting peace

Shortly after President Higgins returned, a former member of the Continuity IRA (CIRA) was murdered. Tommy Crossan had been expelled from the dissident group after a falling out several years ago. Shortly before Easter, he was grabbed by unknown assailants in plain sight in a populated area in West Belfast, and shot repeatedly. Clearly, the murder was intended to send a message, and a very public message at that.

Initial police investigations have suggested that Mr Crossan, a married father of six, was murdered by members of CIRA, or other dissidents. However, the investigation is still ongoing.

Both the Northern Irish First Minister and Deputy First Minister were swift to condemn the murder. Politicians, both British and Northern Irish, have also condemned the murder.

CIRA itself has not commented in response to the murder. The murder just goes to show that, in some ways, the Northern Irish question and conflict is (unfortunately) alive and well. The timing of the murder, is also significant.

Not only did was the killing committed on the 16th anniversary of the Good Friday Agreement, but, coming just after the President of the Republic of Ireland’s state visit, the shooting of Tommy Crossan goes to show that the conflict in Northern Ireland is not totally over. Although peace has been agreed, and political and diplomatic solutions arrived at, underneath the agreements lies the violence and force that characterised the Troubles.

That murder was followed by revelations surrounding another Northern Irish murder. Suspected of being a British Army informer (later information released publicly showed that she was not), Jean McConville, a mother of ten, was snatched by an IRA squad in 1972. It was later revealed that she had been murdered. One of many cases of such disappearances at that time, he murder remained unsolved.

It was only this year that one of the squad that snatched her was arrested. Gerry Adams, Mr Adams, the former MP for West Belfast and the current MP for County Louth in the Republic of Ireland, was questioned about her murder. The former Sinn Fein leader was showed remarkable cooperation, in arranging to meet detectives to answer questions about Jean McConville. Amidst public outrage, he was later released after 40 hours of intensive questioning.

Mr Adam’s file in this case will be passed on to the Northern Irish Public Prosecution Service (PPS), prior to any decision to prosecute. No doubt the PPS will consider this case file carefully, as either arresting Mr Adams, or declining to arrest him on insufficient evidence will cause a public uproar and backlash from various elements of the community and political community in Northern Ireland. Setting the law aside, it will be a hard decision to make, due to the consequences of either option.

It is a decision, though, which has to be made. To come to terms, and to deal with Northern Ireland’s recent turbulent past, to ensure a peaceful future, hard decisions have to be made, and tough questions both asked- and answered. Politicians on both sides of the divide have to have the courage to confront and deal with past events- above all, to have the strength and courage to agree to concessions with the opposition to ensure that such matters are resolved.

For the greater Irish peace (and healing) process, and to fully put an end to the senseless violence, hopefully President Higgins’ visit can be the start of greater diplomacy, and of increased links and ties, between the two nations. Hopefully, such agreement and talks can make such violence as the murder of Tommy Crossan and Jean McConville rare. Until that time is reached, it seems like the process of countering the wrongs and abuses of the past and present are constantly moving two steps forward, and one step back.

Scottish Victory for Consumer Rights

Consumer rights litigant Richard Durkin

In 1998, Richard Durkin bought a laptop in Aberdeen. Neither he, nor PC World, nor HFC Bank (who financed his purchase) could have known that Richard Durkin was making legal history.

He paid £50 up front for the laptop, and signed a credit agreement with HFC Bank for the remainder of the £1,499 price tag. He was also given assurances by the sales assistant that the laptop could be returned if there were any problems, defects or issues.

Upon discovering at home that the laptop had no inbuilt modem, Mr Durkin returned the laptop to the PC World store the very next day. Although eventually refunded his £50, HFC Bank did not consider his credit agreement void upon the return of the laptop- despite the consumer’s repeated assertions that the initial contract of sale was now cancelled by the return of the laptop- and still sought payment from Mr Durkin.

Mr Durkin went to court over his inability to cancel his credit agreement, and HFC’s demands for payment. Instead of being a matter settled out of court, or at a local magistrate’s court, the matter escalated legally. In the ensuing proceedings, Mr Durkin’s credit rating, (and therefore his ability to get credit and loans) had been affected by his essentially defaulting on the credit agreement with HFC Bank (in their eyes). Despite Mr Durkin’s repeated efforts to quite legally cancel his credit agreement, HFC did not consider the agreement void, and so pursued him for the payments due which they considered he should still make. The effect of this was to severely damage Mr Durkin’s credit rating. Loss of capital gains was also an issue before the courts, as Mr Durkin was unable to get the required finance to purchase properties in Spain as he had intended, and indeed started the process for.

Aberdeen Sheriff’s Court in 2008 found for Mr Durkin, and ruled that he could legally return the defective goods, and (sic) cancel the credit agreement. Damages were awarded to the value of £116,000. The key of the matter, the Court held, was in s.75 of the Consumer Credit Act (1974). Applying s.75, the various courts had to establish whether in fact Mr Durkin had legally rescinded the contract, and had the ability to do so under the terms of the 1974 Act. In that matter, the various judges who presided over the case seemingly though differently.

In appeal and cross appeal under the various heads of claim, the case made its way to the First Division of the Inner House of Session (Scotland’s Appeal Court). The Inner House overturned the lower court’s verdict. Upon another appeal, the case made its way from Edinburgh to London, and was heard by the Supreme Court for final adjudication.

The leading judgement was given by Lord Hodge (the Scottish judge on the Supreme Court). In his brief and concise 13 page judgement (with which the other judges agreed), Lord Hodge found in favour of Mr Durkin, allowing his appeal. However, only £8,000 in damages was awarded to Mr Durkin after 16 years of litigation (Lord Hodge was legally unable to restore the damages awarded by the Sheriff’s Court).

Although a shallow victory for Mr Durkin- the case of Durkin (Appellant) v DSG Retail Ltd and another (Respondents) (Scotland) is a great triumph for consumer rights.

Applying Lord Hodge’s verdict, consumers making purchases under a credit agreement can now legally cancel the credit agreement if the purchased goods are rejected on the grounds of being faulty or similar. Additionally, any lender that seeks to blacklist or negatively affect a consumer’s credit rating upon default of a credit agreement now owes the consumer a duty of care to investigate thoroughly if the consumer is stating that they have cancelled the purchase funded by the agreement, and therefore the agreement itself. Indeed, Lord Hodge found that HFC Bank (now owned by HSBC) had a duty to establish the truth behind Mr Durkin’s repeated assertions that the agreement had indeed being terminated- and that the bank had failed to act on, and investigate, those assertions.

Furthermore, a major result of the case is that banks and other financial institutions now have to be especially careful, and be absolutely certain of their facts, before informing credit reference agencies that a customer is in default. In these financial times, such protection as regards negative credit reports is very welcome indeed.

The case is finally over for Richard Durkin, after a 16 year odyssey that has cost him very dearly, and not just financially. Understandably angry at the Supreme Court verdict, in a statement he said that “I am disappointed that the Supreme Court was unable to restore to me the full damages awarded by the sheriff – even though it was clear that they were sympathetic to my position on this… This decision is a great victory for all consumers and I am proud to have been the driving force behind it.”

Despite his own lack of legal victory, Richard Durkin leaves a legal legacy which is to the benefit of a great many consumers.

Such reasonable actions, and acting according to certain duty of care to make accurate statements (applying the famous case of Hedley Byrne & Co Ltd v Heller & Partners), are already a part of tort (civil) law, and banking and financial regulations, due diligence, and consumer rights. Mr Durkin’s case serves to greatly reinforce and strengthen those consumer rights, and to place the onus squarely on the financial institutions to act reasonably as regards the consumer, according to Lord Hodge.

Forex manipulation- and the Bank of England

At a time when the financial industry was sure that no more skeletons remained, and that all the bad behaviour and previous excesses of the turn of the millennium were exposed and dealt with by the regulators- they were wrong.

Although not as high profile or devastating as previous scandals like Payment Protection Insurance, the current scandal reaches right to the top – the Bank of England.

Throughout the criticism and banking excesses, the Bank of England has aloofly remained above the fray. Refusing to comment or get involved in such matters, and leaving the regulators to investigate and punish, the Bank of England, has remained above the murky mess of the financial scandals (as is only right and befitting for the UK’s central bank).

However, very recent allegations and evidence indicate that the reality was not the same as the public image. A few weeks ago, a Treasury Select Committee was convened to investigate allegations that senior Bank of England officials were involved in manipulation the Forex currency trading market.

The Bank steadily denies any such involvement. However, minutes of meetings reveal that a senior Bank official was informed of “attempts to move the market”, and of a meeting with senior Forex dealers and traders from amongst the world’s largest banks.

Further evidence indicates that Forex traders have been communicating with each other in attempts to agree the rate of exchange for currency exchange deals. It is thought some traders used online chat rooms in further efforts to fix the rates for such deals, or to set a benchmark for currency trades. Whilst these accusations are also been investigated, these matters are outside the scope of the Bank of England enquiry.

Pending further investigations, a senior official has been suspended, pending (another) enquiry into their own conduct. Meanwhile, the Bank in an official statement has said that it “does not condone any form of market manipulation in any context whatsoever”. As the central bank, such actions are highly morally and legally questionable. The investigations continue at this time. Indeed, a Bank of England oversight committee is also investigating how much the Bank knew, and what actions were or were not taken, assisted by law firm Travers Smith. In the matter of Forex manipulation, the question really is how much did the Bank know? The answer to that is under investigation.

The Forex manipulation scandal, tipped by many insiders and commentators to be the next Libor rate fixing scandal (or even bigger) has been largely quietly and sensitively investigated by the new Financial Conduct Agency (FCA). Essentially, Forex traders are alleged to have colluded in setting some key currency exchange rates, resulting in very big profits.

With the FCA investigation into the scandal on going, the scale of the rate manipulation prompted FCA Chairman Martin Wheatley to remark that currency exchange fixing was “every bit as bad” as the Libor rate fixing scandal. In the wake of that scandal, banks such as RBS, Barclays and UBS were fined nearly $6bn for fixing the Libor rates at which banks loaned money to each other. Both scandals are on par with the PPI scandal, which is still being resolved at a cost of billions to banks.

To prevent such excesses happening again, banks have improved their compliance and due diligence. More regulations have been imposed. The FCA, led by a fierce Martin Wheatley, has been very proactive and determined in its endeavours to tackle such banking scandals and excesses. Many big financial service providers have been fined or prosecution for current of past wrongdoing. From that, many banks have learned the value of cooperating with the FCA: according to Mr Wheatley when he appeared before MP’s, 10 (unnamed) banks are cooperating or assisting with the current Forex rate fixing investigation.

Celebrated and visionary Bank of England head Mark Carney; how much did he know?

Over all of this sits the Bank of England, the UK’s financial and economic regulator in chief and supreme authority. Under the steady and capable hands of former Governor Sir Mervyn King (now Lord King of Lothbury), and the genius and dynamic direction of its new Governor, Canadian Mark Carney, the Bank has presided over an era of banking scandals untouched by the scandals that has troubled it for so long. Now a scandal reaches to Threadneedle Street itself, a matter of grave concern and embarrassment to the Bank.

The matter also throws up the question of who or how is the Bank of England regulated; ultimately, for bank regulation, quis custodiet ipsos custodes? To paraphrase one MP, either the Bank was guilty of complacency in letting such rate fixing happen (allegedly since 2006/7), or grave stupidity and naivety in not knowing what was happening inside itself.

With the Bank of England now being implicated in a financial scandal, and in the crosshairs of both the government and the regulators, consumers can rest assured that, in this new era of compliance, due diligence and increased regulation, that banks are not going to take part in malpractices as happened previously. These days, the banks have more to fear from the regulators than customers have to fear from their banks. However, such due diligence and compliance itself has to be carefully considered to ensure that a new financial order emerges that is not overly tied up in red tied and regulation. After all, the banks should not be looking over their shoulders in fear of reprisals for the FCA.

It is a delicate balancing act. In the immediate wake of the banking scandals being revealed and prosecuted, regulation was tightened in an instinctive reaction to protect customers. Some consider that such protection has now gone too far, and needs to be relaxed to restore a sense of balance.

The key element in such regulation are the watchdogs (or rather, in the case of the FCA, the seeming attack dogs). However, as the Forex scandal implicating the Bank of England shows, one question has to be asked: quis custodiet ipsos custodes?