LegalDay

The Lord and the Rent Boy

I don't think there has been anything quite like it since the then leader of the Liberal Party, Jeremy Thorpe, was outed by his lover Norman Scott in a courtroom tirade which included - absurd but fascinating - allegations of conspiracy to murder. But, this morning Mr Justice Eady knocked Kate Moss from the front pages of the tabloids with a decision to withdraw an injunction against publication of allegations, made by male escort Jeff Chevalier, against none one less grand than Lord Browne of Madingley, chief executive of Britain's largest company and frequently eulogised as the greatest businessman of the current generation.

Browne's entry in Wikipedia rather amusingly, and without the slightest evidence of intended irony, tells us he is 'a bachelor and lists fine cigars, antique furniture and the arts among his interests'. It reads like the kind of euphemism that used to be common when homosexuality was illegal, which was of course as recently as when Browne began in business, and when Thorpe had an affair with Scott.

Pursuing Browne for perjury seems harsh. It is difficult to see what was so important about whether he met Chevalier through an escort agency or while exercising in Battersea Park that he felt he needed to lie about it. I dare say he deserves to lose his job, and with it the £16m he would have picked up in salary and bonuses between now and when he retires in July, not to mention most of his reputation. It hardly seems worth a criminal prosecution.

Links on LegalDay

Bank Charges

Bank charges - it's a phrase to warm the blood.

How much money did Barclays make in profits last year? It was a lot. It was a very, very great deal. Did HSBC not recently set a record for the highest ever absolute profit for a UK business? No doubt these are large and successful businesses, and there are plenty of shareholders among whom to split the earnings. It is not that we are advocating profit caps or the socialisation of the means of exchange. But still, it is hard to feel sorry for NatWest when it is dragged screaming into the City County Court by the likes Tom Brennan, a recently called barrister - and an instant celebrity - objecting to being charged £38 for a service costing £2.50.

NatWest, purportedly, has offered Mr Brennan £4000 for his £2500 penalty charges, but this is clearly a young man with a sense of the zeitgeist. He is dead right to turn them down. The publicity he has generated over the past couple of days could not be bought by NatWest for tens, probably hundreds of thousands of pounds. Trawling through the keywords being used on LegalDay, bank charges are a highly charged issue.

It is nearly two years now since we first picked up on the issue of bank charges at LegalDay - the first item was in June 2005, when we reported on Stephen Hone - another law student - taking taking Abbey National to court in Plymouth, claiming £2000.

Hundreds of people have since claimed back their charges and there are scores of websites devoted to the issue. The Office of Fair Trading, meanwhile, is running two related investigations into the consumer credit industry. One is looking at penalty charges. The other, looking at current accounts, is a response to the banks' threats to end 'free banking'. It is a hollow threat. Banking is not free, it is extremely expensive, as these two young lawyers have demonstrated. It would be better for everyone if the banks charged for the cost of running an account, and charged again for the real cost of administering unauthorised overdrafts, and dropped the marketing fakery of 'free' accounts.

What is interesting, and rather fun, is the effect of one law student losing his rag and taking his complaint to court. The world will not be quite the same again.

LegalDay News and Links for Bank Charges

Stack v Dowden

As one lawyer put it, most succinctly, I thought - "Get your partner to pay for the gas or the electricity." What you should do is pay the mortgage, because that is what will count when your cohabitation decouples. After 20 years together, and four children, and a court case costing hundreds of thousands, their Lordships came to the conclusion that most lawyers thought they would come to - they divided up the Stack-Dowden castle not in reference to their family life, but in reference to direct financial contribution to the property itself. Cohabitation is not marriage, it is not marriage-lite - it is not anything. Legally, in England, it does not exist.

Cohabitation

Family Law

Stack v Dowden

I'm a Lawyer, I Need Rehab

The Priory, the celebrity dry-out bin in Roehampton, Surrey, is targeting lawyers. Law firms are people businesses, and de-stressed people earn more, apparently. According to the clinic's business development director, a few sessions of Talk Therapy reduces the threat of litigation - from over-stressed staff.

Times

Divorce and Rights to Future Benefits

I wonder how many people are convinced by the decision of Mr Justice Charles in H v H? Admittedly, Mrs H leaves the marriage with £13 million in cash and assets, including the family home. It is not an award anyone would call piddling. What Mrs H thought she was missing was a further £1.4 million to compensate her for loss of future earnings, or more precisely, the loss of the benefit of her husband’s future earnings. He is 44 the next 10 years are likely to provide him with the best of what is evidently a very successful career.

As hard as it is to feel in the slightest bit anxious for either of them, there is a principle buried in here, one which it seems to me Mr Justice Charles has not distinguished with complete accuracy. He talks down the career which Mrs H gave up in order to provide a home and family for her and her husband – as a teacher she would not have expected to earn very highly. Equally, He talks up the non-economic rewards of being a homemaker – “numerous joys and much satisfaction and pleasure”.

Mr H in the judgment, by contrast, is seen to have built his fortune on labour and personal sacrifice, his success deriving from “talents, hard work and good fortune,” which apparently brought bringing him little in the way of non-financial satisfaction. His wife could not make more than a negligible contribution to his future earnings.

The problem here is that the entire judgment is based on the idea that money is the only real value, unless describing Mrs H’s contribution as a mother and wife, when virtue is suddenly its own reward. Mrs H had a similar education as her husband – they met as students at St John’s College, Oxford – and might have valued her career as a teacher as much, possibly more, as her husband did his. Had she not married, she may have switched after a couple of years to something more lucrative, as many people do. Neither is it fair to assume that Mr H pursued his career purely for financial returns. It is almost certain that he enjoyed what he did and that his career was replete with “numerous joys and much satisfaction and pleasure”.

There is another problem here, which is the attempt to judge the unjudgable. How can Mr Justice Charles know – how can anyone know – and anyway of what earthly relevance can it be? – how much a stable and successful home and family contributed to Mr H’s dazzling career, and how much was attributable to ‘hard work’? And why is his ‘good fortune’ good for him but not his wife?

A further issue is the concept of the ‘clean break’. Following a short, childless marriage it may be possible, but in a relationship that has run into decades and produced four children it is a nonsense. No one gets back their youth, no one divorces their children.

Should Mrs H share in the future fruits of her husband’s career? I would say, “Yes – as much as he should share in the future of their children."

LegalDay Links

Times

Tesco, Thailand and the Right to Trade

Tesco fights hard, and often it wins. One battle it appears to be losing is in Thailand, where last year’s military coup was less about corruption, as claimed by the generals, and more about the success of the British supermarket. Tesco was doing in Thailand what it does in the UK, attracting customers – and staff – to what is a compelling business. The first, and so far the only meaningful legal reform under the Thai military regime, was not a campaign against corruption, the benefits of which the soldiers enjoy quite as much as the politicians, but limit on foreign direct investment in a manner designed to squeeze out Tesco in favour of small shopkeepers.

Yesterday Tesco made its submission to the Competition Commission in relation to the inquiry into the grocery market in the UK. I have to admit I suspect there is a lot of social and political impetus to this inquiry. If Tesco is manipulating prices, or inhibiting trade in certain assets, such as land, then there is a case for an inquiry. But if other businesses are failing to keep up, or if certain sets of suppliers are falling by the wayside, or if less efficient economic models are falling into decline – that is not the business of the Competition Commission.

I have no idea whether Tesco is manipulating prices, or if its land bank is excessive and an inhibition on trade. I hope the commission will enlighten us. For other supermarkets, I have little sympathy. Fifteen years ago Sainsbury was sparkling and Tesco in the doldrums. Asda has the backing of WalMart, not exactly a shrinking violet in global retailing.

I am not much sympathetic to the suppliers, either, to be honest. The model of the 17^th century enclosed farm that continues to dominate the generally mawkish debate on agriculture in England is not a product of nature. If Tesco can better source its produce in Africa, good luck to the Africans and about time they had their chance. The natural state of England is oak forest, to which our farms, if abandoned, would revert in about 20—40 years. I would personally be happy with that. Neither is the food-miles argument terribly strong – European farms are typically so hopeless that they use more carbon-based energy per item than farms abroad, including transport.

As for the equally mawkish ‘debate’ on the decline of the high street – thank you and goodbye is my response. Without full-time housewives, who have the time and skills to shop daily from strings of small shops, the high street is a redundant economic model. Supermarkets, in other words, provide a lot of the efficiencies on which a modern economy depends. I understand that towns, suburbs, villages, when they lose their high streets lose a meaningful focal point of their identity. Well re-invent them. The same argument was used about coal mines, if anyone still remembers what they were.

Tesco claims it does not have a stranglehold on the market, that ‘most shoppers’ are a 30 minute drive from over 20 grocery suppliers, including at least one of the big-five supermarkets. It doesn’t sound to me like a case for a military coup.

LegalDay Links

Drink, Sex and Laws of Consent

As the gatehouse keeper in Macbeth very sensibly explains, drink and sex do not go well together - drink provokes the desire, but it takes away performance. He was referring to male impotence, but might just as well have been discussing female consent. Alcohol is a disinhibitor and, in the early stages, a stimulant. Women as much as men are more likely to want sex, and are less likely to raise objections to unsuitable places and partners, when they are drunk. Judges – famously sober – and still more so juries, are disinclined to convict a man of rape if it is clear the woman was drunk. No doubt she thought more of it later, and fair enough, but that is not rape.

Against a background of an abysmally low conviction rate for serious rape cases, the government was considering defining what is consent, and at which levels it was eroded by alcohol. The Appeal Court - Sir Igor Judge, Head of Criminal Justice, sitting with Lady Justice Hallett and Mrs Justice Gloster - in quashing the conviction of Benjamin Bree, has rightly told them not to bother. It is possible for a woman having consumed relatively little alcohol, or some other substance, to be beyond consent, and it is possible for a woman to consume a great deal and still give consent. The state of mind of the male needs also to be considered. Two people having sex while both are drunk is one thing, a compos mentis man having sex with a drunken woman is something else.

LegalDay Links

Service Companies

The Revenue seems to have figured something out in respect of Managed Service Companies and the practice of hiring temporary staff through limited companies, sometimes known as Personal Service Companies. It is unclear from the Budget speech and the related press releases exactly what the changes will be, but the focus is likely to be on the practice of paying individuals in dividends for what is essentially an employment contract. The first impression is that this will affect people contracting to agencies (set up as MSCs) rather than to those operating independently on the advice of a chartered accountant. Accountancy and legal practices established as MSCs appear to be exempt. Lawyers working in this area should sharpen their pencils now.

LegalDay Budget 2007 Links

What Is Carbon Zero?

The budget was ‘boring’ – until the end of the speech, when suddenly it was a ‘trick’ or a ‘flourish’, depending largely on your political point of view. I am going to go for a flourish, myself. The 2p off income tax was an iconic moment in the sweep of modern British political history. Just when David Cameron thought he was about to transform Old Conservatism into New Labour with promises of improved public services, New Labour swivelled around to become the Old Conservatism.

What is a zero carbon house? Not many of us know just yet, but I suspect a lot of people will be wanting to find out, and there will be plenty of legal work in developing and explaining the rules. I had my first invitation to a conference on the issue this morning.

Tying relief on stamp duty to carbon reduction is a clever idea, though a zero carbon requirement may be somewhat daunting. A simple raising of the thresholds for inheritance tax and capital gains tax is more reasonable, if less headline-grabbing.

LegalDay Links

Take Me to Your Regulator

The Barclays approach to ABN Amro has a certain panache. It is curious to see what would be the world’s fifth largest financial institution being cobbled together in a couple of days – perhaps that is due to the underlying uniformity of modern banks.

What is interesting is the ‘regulator shopping’. ABN Barclays will be incorporated in the UK and its primary listing will be on the London Stock Exchange. But it proposes that the De Nederlandsche Bank should be its primary regulator. This is apparently, and not surprisingly, not much to the liking of the Financial Services Authority. Should a business incorporated and listed and with a large slice of its interests in one jurisdiction, simply be allowed to appoint its regulator by moving its nominal headquarters elsewhere?

LegalDay Links