bluuebunny/crossref_metadata_2025 huggingface dataset:
Advisory Functions of the Commissions
Authors: Robinson Isabel , Varney Howard
Published: July 2018

Principle 12 deals with the advisory functions of truth commissions. The advisory function of truth commissions is one of the most concrete ways that they can achieve their goals of helping rebuild society and prevent further violence. Such function is an essential dimension of the forward-looking dimension of truth-telling and truth-seeking processes. In particular, it enables truth commissions to pay attention to the experiences and role of women in transitioning societies, as well as to intersect with others measures aimed at combating impunity, including reparations and criminal prosecutions. This chapter first provides a contextual and historical background on Principle 12 before discussing its theoretical framework and how the recommendations of truth commissions have been implemented. It also highlights some of the key challenges involved in the implementation of a commission’s recommendations, noting that the failure to implement recommendations is often the result of a lack of political will.
Duties of States with Regard to the Administration of Justice
Authors: Ambos Kai
Published: July 2018

Principle 19 outlines the duties of States with regard to the administration of justice for victims of serious human rights violations and other international crimes. Under this Principle, States must ensure that those responsible for serious crimes under international law are prosecuted, tried and adequately punished. A state’s (criminal) justice obligations have long been recognized by regional human rights courts and international human rights bodies. While the fight against impunity is the explicit aim of the International Criminal Court (ICC) and a major goal of the United Nations, the duty to prosecute lies primarily with the domestic justice system with regional or international mechanisms being subsidiary or complementary. This chapter first provides a contextual and historical background on Principle 19 before discussing its theoretical framework and how human rights courts and treaty bodies have interpreted the duty of States to investigate and prosecute serious human rights violations.
Measures for Strengthening the Effectiveness of International Legal Principles Concerning Universal and International Jurisdiction
Authors: Gaeta Paola
Published: July 2018

Principle 21 outlines measures for strengthening the effectiveness of international legal principles concerning universal and international jurisdiction. In particular, it requires states to establish universal criminal jurisdiction and highlights their obligations to prosecute or to extradite (aut dedere aut judicare) states may possess under treaty law. The relationship between dedere and judicare might vary depending on the formulation of the relevant treaty obligation. A controversial issue is whether states can assert ‘pure’ universal criminal jurisdiction, and whether the aut dedere aut judicare treaty based formula is opposable to non-state parties. This chapter first provides a contextual and historical background on Principle 21 before discussing its theoretical framework, focusing on the definition and scope of ‘universal jurisdiction’ and the aut dedere aut judicare principle. It also examines how Principle 21 has been exercised in practice.
Nature of Restrictive Measures
Authors: Pinzauti Giulia
Published: July 2018

Principle 22 is an overarching guideline to states on the nature of the safeguards and restrictions that they may need to adopt and enforce in order to counter impunity more effectively. It is an umbrella provision listing certain rules or principles in national legal systems which might impede the criminal prosecution or other scrutiny of human rights violations by domestic courts. These rules and principles include those regulating amnesty, prescription (statutory limitations), extradition, the right to asylum, due obedience, repentance, the jurisdiction of military courts and the irremovability of judges. This chapter first provides a contextual and historical background on Principle 22 before discussing its theoretical framework and how the safeguards or restrictive measures outlined in Principle 22 have been applied in practice.
Restrictions and Other Measures Relating to Amnesty
Authors: Siatitsa Ilia Maria , Wierda Marieke
Published: July 2018

Principle 24 deals with restrictions and other measures relating to amnesty. It requires that no amnesty should take precedence over the obligation of states to prosecute, try, and punish the perpetrators of serious crimes under international law. Through the impunity principles, the obligation to prosecute becomes intertwined with the prohibition of amnesties. An amnesty has long been considered a valuable tool to end conflicts or to ease transitions to democracy. In reality, however, state practice on amnesties remains inconsistent and the debate on amnesties continues to persist. After providing a contextual and historical background on Principle 24, this chapter discusses its theoretical framework, focusing on issues arising from the obligation to prosecute, the right to remedy, amnesties in international criminal law, and the right to refuse amnesty. It also examines how amnesties are used by states to end armed conflicts.
Rights and Duties Arising Out of the Obligation to Make Reparation
Authors: Haldemann Frank
Published: July 2018

Principle 31 deals with rights and duties arising out of the obligation to make reparation. It reflects a significant trend in recent international affairs: the call for ‘reparations’ as a means of ‘correcting’ legacies of serious and widespread human rights abuses. The idea of a general individual right as codified in Principle 31 is consistent with existing international law, but arguably has no strong legal basis. The Principle opens with a strong normative claim: ‘Any human rights violation gives rise to a right to reparation’. This claim is far from self-explanatory and raises a variety of questions about its meaning and foundations, such as the question of what it is to have a right to reparation. After providing a contextual and historical background on Principle 31, this chapter discusses its theoretical framework and highlights some of the legal, and predominantly international practices relevant to the Principle.
Reparation Procedures
Authors: d'Argent Pierre , de Ghellinck Isabelle
Published: July 2018

Principle 32 deals with the procedural aspect of the right to reparation, that is, the right for victims of human right violations to access remedial procedures. It addresses three issues: the right to access remedial procedures, procedural requirements of national reparation programmes, and regional and international procedures. While the obligation of states to provide effective remedies is enshrined in most of, if not all, the key international human rights treaties, Principle 32 provides for a right to all victims to access remedies. ‘Reparation’ and ‘remedies’ are both envisioned as victims’ rights, but the distinction between them is vague. After providing a contextual and historical background on Principle 32, this chapter discusses its theoretical framework and how the reparation procedure, judicial or administrative, dealing with gross violations of human rights at national or international level has been implemented.
Publicizing Reparation Procedures
Authors: Laplante Lisa J
Published: July 2018

Principle 33 focuses on the obligation of the State to publicize ‘ad hoc procedures’ for the distribution of reparations. The ‘publicity principle’ assures the right to compensation, restitution, non-material, symbolic reparations and other remedies and places the onus on policymakers to implement outreach campaigns that inform victims of these right and how to access them. Principle 33 emanates from the idea that ‘a reparation mechanism has little practical value if potentially eligible victims are not aware of the opportunity to make claims or are not given timely information on how to do so in a language they can understand’. After providing a contextual and historical background on Principle 33, this chapter discusses its legal framework and practice, with emphasis on United Nations guidelines and principles; international mass claims processes; international courts, commissions and committees; and country specific practice.
Scope of the Right to Reparation
Authors: Grosman Lucas S
Published: July 2018

Principle 34 deals with the scope of the right to reparation, which includes restitution, compensation, rehabilitation, and satisfaction. In order to determine what each measure entails, the Impunity Principles should be read in conjunction with the Reparation Principles, adopted and proclaimed by General Assembly resolution 60/147 of 16 December 2005. Principle 34 also outlines the content of certain rights owed to families of victims of forced disappearance, namely: the right to be informed of the fate or whereabouts of the disappeared and the right to obtain the body of the victim, once it has been identified. These rights have a substantial and a remedial dimension, and thus contribute to the reparation of the harm. This chapter first provides a contextual and historical background on Principle 34 before discussing its theoretical framework and practice.
General Principles
Authors: Mayer-Rieckh Alexander , Duthie Roger
Published: July 2018

Principle 35 deals with guarantees of non-recurrence of human rights violations, along with some general principles and objectives. It outlines ‘institutional reforms and other measures’ as the means of achieving prevention through their contribution to the rule of law, respect for human rights, and public trust in government institutions. It also highlights the importance of adequate representation of women and minority groups as well as broad public consultation in the process. Four ‘objectives’ are listed in Principle 35: the first repeats the notion of the rule of law and the next three refer to specific measures that are among those included in Principles 36–38. This chapter first provides a contextual and historical background on Principle 35 before discussing its theoretical framework and practice. It concludes with a critical assessment of the notion of guarantees of non-recurrence itself.
Reform of State Institutions
Authors: Mayer-Rieckh Alexander , Duthie Roger
Published: July 2018

Principle 36 deals with institutional reform in the aftermath of human rights violations. It contains measures that focus on state institutions responsible for violations and seek to identify the causes of the violations. The measures aim to reform structures and systems that allowed, facilitated, or promoted violations, and have the potential to act as an enabling condition for other transitional justice mechanisms by weakening or removing institutional sources of opposition. This chapter first provides a contextual and historical background on Principle 36 before discussing its theoretical framework and practice. It also examines the shift in emphasis from purges, to vetting, to broader institutional reform; the influence of historical context in Latin America and Eastern Europe in particular on the articulation of the measures; and the emphasis on the preventive function of the measures.
Nature and Characteristics of Intangibles
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter discusses the fundamentals of property law, particularly considering the nature of property interests, and the distinction between rights in rem and in personam, or between property interests and personal interests. The law of property is concerned not with things, but rather with interests (or rights) in things. Whereas the thing itself may be (but is not always) tangible, the interest in (or relating to) the thing is inevitably intangible or abstract. The distinction between property interests and personal interests may be expressed as the difference between owning something and being owed something. The chapter then considers the English law classification of things, and the place of choses in action within that classification; the characteristics of choses in action; and the extent to which ownership in choses of action or intangibles can be shared, divided, or otherwise fragmented.
Debts
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter focuses on debts. A debt is a right to demand payment of money at a stipulated time. That stipulated time may be a future specific date, or the debt may be payable on demand or on the occurrence of some defined future event. In order to be a debt, the money must be due as a matter of legal obligation, that is, arising out of a contract or a deed. At times—particularly for accounting and tax purposes—attempts are made to further classify debts. One classification of debt is known as ‘book debt’. Book debts are best defined as debts in some way connected with the creditor's trade, or debts connected with and growing out of the creditor's trade. The chapter then looks at syndicated loans, where two or more banks severally lend to a single borrower, and the nature of debts as property.
Rights Under a Contract
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies rights under a contract. Contractual rights exist between, and are only enforceable by, the parties to the contract. In other words, contractual rights and obligations are essentially bilateral. Two principles of the common law tend to prevent third parties from enforcing the contract: a contract for the benefit of a third party cannot be enforced directly by that party; the promise cannot be indirectly enforced by the contracting party. The chapter then considers the statutory exception to the rule that exists in the shape of the Contracts (Rights of Third Parties) Act 1999, as well as the nature of contractual rights as property.
Intellectual Property
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter examines intellectual property. The governing principles relating to intellectual property are very different from the principles that underlie other choses, like rights under contracts or debts. Like shares, intellectual property rights are characterized by specific statutory rules relating to their creation, as well as to their transfer. Intellectual property rights can be divided under six heads: patents; copyright; moral rights; industrial design rights; trademarks; and confidential information. In each case, the holder of the right is able—by virtue of ownership—to prevent others from doing what they otherwise could do. Each of these intellectual property rights has four different aspects: the intellectual property right itself; rights of action for infringement; validity challenges; and licensing.
Documentary Intangibles and Negotiable Instruments
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies documentary intangibles and negotiable instruments. An intangible thing, by its nature, is not a physical object. However, there are instances where intangibles are equated to physical objects. Examples are bills of exchange, promissory notes, bearer shares, depository receipts, and certificates of deposit. There are two different kinds of documentary intangibles: negotiable instruments and transferable instruments. Negotiable instruments are documents embodying obligations which are not only transferable on the transfer of the document, but which have the attribute of ‘negotiability’. Meanwhile, transferable instruments are documents which embody obligations which are transferable, but which do not have the attribute of negotiability. The chapter then considers the implications for documentary intangibles of technological developments such as dematerialization, where paper documents are replaced by electronic documents or electronic systems.
Transfer of Choses in Action: Historical Overview
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter discusses the transfer of choses in action. Choses in action have their origin in rights that are personal and, for this reason, non-transferable. This approach of the common law did not change, even when the scope of choses expanded so as to include choses that could not possibly be regarded as personal. Second, as a matter of policy, the common law wished to discourage the acquisition of rights of action by third parties for fear of unduly oppressing the debtor or obligee. The chapter then looks at the intervention of equity. Equity's intervention effectively overtook the common law, with equity taking a much more favourable approach to the question of the transfer of choses in action.
Conceptual Underpinnings
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter examines the manner in which choses in action can be assigned when they are not embodied in a negotiable instrument. Assigning a chose in action involves the transfer of that chose from the assignor to the assignee. Leaving aside the legal consequences of such an act, the legal requirements necessary to effect an assignment ought to be straightforward and easy to state. However, this is not the case. The English law of assignment is highly and unnecessarily complex. This is for a number of reasons: complexity arising out of the number of different ways in which a chose in action can be transferred; complexity arising out of the interrelationship between the various forms of equitable assignment; complexities arising out of the interrelationship between the various different statutory modes of assignment; and complexity arising out of the interrelationship between equitable and statutory assignments.
Transfer of Insurance Contracts
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies insurance contracts. A contract of insurance is one whereby one party (the insurer) promises in return for a money consideration (the premium) to pay to the other party (the assured) a sum of money or provide him with some corresponding benefit, upon the occurrence of one or more specified events. Their assignability is complicated by two factors. First, there are a number of different rules whereby an assignment can be effected, in addition to the equitable and statutory (section 136 of the Law of Property Act 1925) methods. Second, when considering the assignment of insurance contacts, it is important to be clear about what it is that is being assigned. The chapter then considers the transferability of the assured's right under four types of insurance: indemnity insurance; life insurance; marine insurance; and reinsurance.
Transfer of Leases
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter discusses the manner in which leases can be transferred or assigned. Leases constitute an important exception to the general rule that burdens cannot be assigned. The assignment of any lease, no matter what its duration, must be effected formally by deed. This is so even where the lease could have been created informally. Additionally, so far as leases of over seven years are concerned, the transfer must be registered in order to be effective. There is a fundamental distinction between a legal and an equitable lease. A legal lease comes into being when the requisite formalities for the creation of such a lease have been complied with. Meanwhile, an equitable lease comes into being when, although the requisite formalities have not been complied with, there is nevertheless a contract for a lease to which equity will give effect.
Assignment of Burdens
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies the assignment of burdens. In general, while a benefit or right under a contract is assignable, a burden or obligation under that same contract will not be assignable. The rule that burdens cannot be assigned needs to be considered in the context of those choses—notably contracts, but also leases and shares—that contain both benefits and burdens. However, there are a number of limited exceptions to the general rule. These include the unpaid vendor's lien over land; the rule that the burden of a restrictive covenant over freehold land can bind successive owners of that land; the transfer of obligations contained in leases through successive landlords and tenants; the assumption of obligations by a new shareholder on the transfer of the legal title in the shares to him; and the doctrine of ‘conditional benefits’ which applies to the assignment of rights under a contract.
The Assignment of Bare Rights to Litigate: Champerty and Maintenance
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter examines the doctrines of champerty and maintenance—the most prominent examples of a public policy limitation on the ability to assign. The doctrines of champerty and maintenance trace their origins back to the earliest days of the common law, and indeed were the basis for the common law's traditional antipathy to all assignments. Champerty is traditionally described as a species of maintenance or ‘an aggravated form of maintenance’ that is said to occur ‘when the person maintaining another stipulates for a share of the proceeds or the action or dispute or other contentious proceedings where property is in dispute’. The chapter then explains the effect of champerty and maintenance on an assignment or other contract.
Personal Obligations
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter focuses on personal obligations. As has been described, one of the reasons contractual burdens are generally unassignable is because the beneficiary of the promise cannot, without his consent, be deprived of his rights as against his contractual counterparty. Here the concern is with the converse situation, where the beneficiary of a right wishes to transfer that right to someone else. The chapter then considers the reasons for the rule that a personal contractual obligation should not be assignable to a third party, analyses the test established by the relevant case law for determining whether a particular obligation is indeed a personal obligation, and sets out a number of the ways in which this test has been applied to specific factual scenarios.
Prohibitions On Assignment
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies the prohibitions on assignment. Depending on how it is framed, a prohibition on assignment can have a number of different effects. This will always be a question of construction. For example, a clause that appears to be directed towards prohibiting assignment may in fact prohibit only novation, or sub-contracting, or only outright assignments and not assignments that are executed by way of security. Likewise, a prohibition on assignment has been held to extend even to the grant of a charge, notwithstanding the fact that a charge is distinct from an assignment. In the specific context of prohibitions on assignment, at least four different types of term were identified. The chapter looks at these various possible terms, and their validity and enforceability.
Consequences and Effects of An Assignment
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter discusses the consequences and effects of an assignment. Although the paradigm of transfer applies clearly to multilateral intangible property, it applies much less easily to bilateral intangible property. Interests in multilateral intangible property are fully fledged property rights, good against ‘all the world’. Bilateral intangible property, whilst undoubtedly having some of the characteristics of property, lacks this characteristic of universal enforceability. In the case of bilateral intangible property, the right that is transferred remains, for all its transferability, a personal right as against an identified debtor. There is no question of a right subsisting against ‘all the world’. Rather, there is a right—originally owed by the debtor to the assignor—that is transferred from the assignor to the assignee.
Priorities and The Loss of Title
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter examines priorities and the loss of title. Even though the thing which an owner owns continues to exist, it is possible for that owner to lose his rights over that thing in circumstances other than where he has voluntarily disposed of his ownership. Obviously, if an owner voluntarily disposes of his interest in a thing, he loses his rights over the thing. Priority disputes concern the case where two rivals claim the same thing or where one person claims a right in a thing ranking more highly than another's claim in the same thing. Different questions arise where a subsidiary interest is created out of a larger set of rights. Where such subsidiary interests are created, and they conflict in the sense that two persons claim the same interest, the rival claims of the owners of these rights fall to be determined by the priority rules considered in this chapter.
Vindication Of An Owner’s Rights
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter studies the manner in which an owner of property can vindicate his rights if they are interfered with by another. An owner who has been wrongfully deprived of his property, whether that property is tangible or intangible, and whether the claim is brought as a claim in tort (as a claim in conversion) or in equity (as an ‘equitable vindicatio’), must frame that claim as a ‘following’ claim and/or as a ‘tracing’ claim. When an owner seeks to follow property, he is seeking to identify his property in the hands of another. Essentially, in order to follow property, an owner must show: that he was unlawfully deprived of property that he owned; that the person he is asserting his claim against holds that property; and that he has a better right to the property than the person holding it.
Involuntary Transfers
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter examines involuntary transfers, that is, assignments or transfers that occur not by virtue of a party's or parties' choice, but by operation of law. Involuntary transfers occur in a number of contexts. One of these has already been considered, namely the statutory assignment of a bankrupt's property to his trustee in bankruptcy. A further type of statutory assignment that occurs in an insurance context—the assignment of an insured's rights against his liability insurer to a third party, to the extent of the insured's liability to that third party by virtue of the Third Parties (Rights Against Insurers) Act 1930—has also been examined. As such, the chapter focuses on three types of involuntary transfer: subrogation; divorce and dissolution; and succession.
Assignment and The Conflict of Laws
Authors: Smith Marcus , Leslie Nico
Published: July 2018

This chapter discusses the conflict of laws. Conflict of laws questions are typically analysed under three heads: jurisdiction; choice of law; and the enforcement of foreign judgments. Questions of jurisdiction refer to the rules that determine whether or not an English court will assume jurisdiction over a particular dispute. Choice of law questions arise where an English court (having jurisdiction to determine a dispute) is presented with a dispute, or issues arising out of a dispute, having a foreign law element; choice of law rules provide the mechanism for determining what law should apply to which issue. Meanwhile, issues relating to the enforcement of foreign judgments refer to the rules which determine when a foreign judgment is enforceable in an English court. Since no special issues of enforcement arise in the assignment context, this chapter focuses on questions of jurisdiction and choice of law.
Legal and Conduct Risk in the Financial Markets
Authors: McCormick Roger , Stears Chris
Published: July 2018

This third edition on legal risk has been expanded to include much new material specifically on conduct risk. It has been updated to take into account developments in the law and professional standards concerning such risks and associated values in the context of the financial markets. Significant (and in some cases, endemic) conduct-related scandals, such as the widespread mis-selling of financial products and LIBOR manipulation, exposed by the financial crisis, have resulted in legal and regulatory change in equal measure (and profound effect) to that of the prudential and financial stability concerns captured in the second edition. Consequently this new edition fully examines the current approach to trust, ethics, and conduct within the broader framework of reputational and legal risk. In doing so, it clarifies what constitutes legal risk in contemporary financial markets and how to manage it, drawing on examples and case studies. Other developments in areas such as the resolution/insolvency of banks, the revision of the UK regulatory structure from the Financial Services Authority to the Financial Conduct Authority and Prudential Regulation Authority, and the recently made new crime of reckless management of a bank are all considered in full. There is also discussion of trends in areas ripe for development such as fiduciary duty amongst financial markets participants.
Why Legal and Conduct Risks
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter traces the emergence of concerns about legal and conduct risk. From around the time of the first major UK privatization share issues of the 1980s, the history of the financial markets has featured a number of significant developments that have tended to bring concern about legal risk to the fore, albeit in specific contexts. These include the growth of global markets, the arrival of ‘universal’ banks (whose business involves much more than banking, as traditionally understood), and the huge expansion of markets in instruments commonly known as ‘derivatives’ and other highly structured financial products. Although such developments have brought benefits, they have also increased the complexity of financial activity. Many argue that these directly contributed to the underlying causes of the recent global financial crisis.
Risk and Capital
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter considers the link between issues of risk and capital. It argues that although all commercial enterprises take risks, the activities of banks and other financial services enterprises give rise to special considerations because they may attract funds from individuals who have either no appetite for risk or a much more conservative attitude to risk. Moreover, the interconnection between financial institutions in the wholesale financial markets also means that if one institution gets into financial difficulty there is a serious risk, as the recent global financial crisis has shown, that the problem may spread rapidly to other financial institutions and cause serious financial instability, damaging economic activity across the board. Indeed, the evolution of the ‘credit crunch’ into the financial crisis, triggering the global economic recession that began in 2008, appeared to follow exactly this pattern.
The Global Context
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter considers how legal risk issues are dealt with outside the UK. Recent developments in law and policy, especially in the financial sector, have been influenced by the impact of globalization. The recent global financial crisis also triggered a new resolve at international, governmental level to seek more effective ways of achieving some measure of globally effective regulation for the financial markets. EU directives are currently (before Brexit takes effect) the single largest source of regulatory change in the London financial markets. Policymakers increasingly look at the comparative position in other similar countries to address the need for English law to remain in step with international developments that assist with the efficient functioning of a financial market wishing to attract international financial institutions and their clients.
The Lawmaker, the Regulator, and Current Preoccupations
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter considers the role of lawmakers and regulators in managing legal risk. It argues that English law must be able to cope with the changing nature of market transactions as well as ensure that the regulatory framework keeps pace with changing risk profiles. Steps must be taken to prevent a mismatch between the expectation of the law and modern commercial reality. The lawmaker’s job is never finished or complete since the sections of society principally affected by what we loosely call ‘financial law’ are in a state of virtually constant change and so the demands of the legal system are also constantly changing. Regulators also develop enforceable rules and standards despite the probability that any financial misdemeanour by a regulated body will be blamed on the regulator.
Market and Regulatory Failure
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter first discusses the origins of the financial crisis, highlighting practice of ‘packaging and selling’ credit risk by financial market participants that led up to the crisis. It argues that although, in retrospect, many aspects of that practice look very bad indeed, the idea that banks might originate a credit exposure and then transfer the credit risk attached to it to a third party was, before the financial crisis, considered to be part and parcel of sound risk management. The discussion then turns to credit-rating agencies. Analysis of the financial crisis and ‘what went wrong’ has shown that rating agencies were too generous with their rating of many of the structured products that contributed to the collapse.
The Initial Impact of the Financial Crisis on Financial Markets
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter discusses the initial impact of the global financial crisis, covering the seize-up of the inter-bank market; the run on Northern Rock in September 2007; the ‘regulatory failure’ in the UK and proposed changes; other UK financial institution failures, near failures, and rescues; and US financial market problems. It argues that throughout history, there have been episodes of over-eager lending, reckless investing and poor risk management, leading to financial failure and calls for help. Although the recent crisis was supposedly different because the securitization of debt gave the appearance of liquidity and sophisticated risk management, it also had the same common themes of greed and stupidity.
The Initial Legal and Regulatory Responses to the Financial Crisis in the UK
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter discusses the various laws, regulations, and comparable measures that were passed or proposed in response to the financial crisis in the UK. It considers the measures that have come into effect in the UK in some detail, whereas measures that affect only other jurisdictions are considered in outline only. The significant volume of case law triggered by the Lehman insolvency is also considered. The chapter begins with an overview of legal and regulatory responses. It then covers the Banking (Special Provisions) Act 2008 and the Banking Act 2009; Lehmans UK litigation, the Landsbanki ‘Freezing Order’, the Turner Review and the initial response of the FSA, and the Walker Review.
Financial Services (Banking Reform) Act 2013
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter charts the passage of the Financial Services (Banking Reform) Act 2013. The Banking Reform Act was enacted in December 2013 and comprises of 8 parts and 10 schedules. The Act was intended to deliver on the government’s plan to create a more robust, better regulated and managed banking system, that supports the economy, customers and small businesses. The Banking Reform Act implemented the recommendations of the Independent Commission on Banking (on banking-sector structural reform) and the key recommendations of the Parliamentary Commission on Banking Standards (on behaviour, culture, and professional standards within the banking industry). The Act amended the FSMA, the Insolvency Act 1986, and the Banking Act 2009. It also provided the legislative platform for an enhanced accountability regime within financial services.
Individual Accountability
Authors: Mccormick Roger , Stears Chris
Published: July 2018

A defining characteristic of post-financial crisis regulatory reforms is the focus on reinforcing individual accountability. The reforms aim to bridge a perceived ‘evidentiary gap’ in situations where there is a case for placing personal responsibility on individuals within financial institutions in relation to misconduct manifested within their area of responsibility, but due to the structural and operational complexities of the institution, an enforcement action/prosecution is not likely to succeed. This chapter summarises the most salient of ‘individual accountability’-focused reforms, either under consideration or fully/partially implemented. This includes a new, enhanced, framework for the assessment of individuals’ fitness and propriety and the internal (and/or regulatory) approval of them to perform certain roles; subtle changes to the enforcement approach of the Financial Conduct Authority; the introduction of new criminal offences for misconduct in senior office and the facilitation of financial crimes; and the reinforcement of whistleblowing procedures within firms.
General Legal and Conduct Risk Implications of the Crises and Regulator-Led Redress
Authors: Mccormick Roger , Stears Chris
Published: July 2018

In the post-financial crisis era, conduct regulation has permeated every facet of an institution’s operations. Not only does the legal framework for the delivery of redress impact the legal risk profile of an activity, but the very ‘approach’ of the regulator exacerbates the legal risk inherent in that activity. This issue is of specific relevance in the context of mis-selling cases, as the regulator may direct (or otherwise sponsor or influence) the terms of redress and in ways that may not be perfectly aligned to a strict application of liability under English common law. This chapter first explores post-financial crisis litigation and criminal charges and the influence of government and regulators on the provision of redress. It then analyzes a legal brake on liability — specifically, the impact of contractual estoppel in mis-selling cases. It concludes with a review of the regulatory factors relevant to redress and the leveraging of post-crises sentiment to promote extra-regulatory schemes.
The Role of International Institutions in Financial Law Reform
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter focuses on United Nations Commission on International Trade Law (UNCITRAL), the International Institute for the Unification of Private Law (UNIDROIT) and the European Bank for Reconstruction and Development (EBRD). UNCITRAL was created in 1966 by a resolution of the United Nations General Assembly. It was given a general mandate to further the progressive harmonization and unification of international trade law and regards itself as ‘the core legal body of the United Nations system in the field of international trade law’. UNIDROIT is an independent inter-governmental organization with 63 member states. The purposes of UNIDROIT are to ‘examine ways of harmonising and coordinating the private law of States and groups of States, and to prepare gradually for the adoption by the States of uniform rules of private law’. The EBRD is an international financial institution that supports projects in more than 30 countries to promote transition to a market economy.
‘Brexit’
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter considers the legal risks raised by Brexit. These include change of law risk for financial markets and especially for institutions that wish to do cross-border business in the EU. For example, while the UK remains in the EU, financial institutions carrying on certain ‘regulated activities’ are afforded so-called ‘passporting’ rights pursuant to which, broadly, they can take advantage of the fact that they are established and appropriately authorised in one member state to do business in other member states, without the need for separate permissions or authorisations in those other states. If the UK leaves the EU, such passporting rights may be terminated unless the Brexit negotiation results in them being preserved in some way.
A Case of Conceptual Impossibility
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter discusses the case of Re Charge Card Services Ltd, which concerned the relationship between a company and a finance house that provided funds to it, pursuant to an invoice discounting agreement, by purchasing trade debts of the company. Under certain circumstances the company was obliged to repurchase trade debts, which it guaranteed would be paid. The accounting and payment system operating between the parties gave the finance house various rights to hold on to monies, make deductions from payments, and exercise set-offs. When the company went into liquidation, it was contended that certain rights of the finance house were void as against the liquidator because they constituted charges over book debts and they had not been registered as required under the Companies Act 1948.
Settling Differences
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter examines some of the other legal uncertainty issues, principally in relation to set-off and netting, that were troubling various sectors of the financial markets at around the time of the Hazell v Hammersmith and Fulham London Borough Council and Re Charge Card Services Ltd cases. It first looks at a number of general, but very important, concerns that lawyers in the market had in relation to the operation of set-off and netting. Second, it considers a particular form of transaction that featured many of those (and other) concerns. Finally, it examines some of the more significant case law and legislative developments. In reviewing these issues, readers should bear in mind the huge importance that ‘certainty’ in this area of the law has now assumed.
Sources of Legal Risk
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter considers the various sources of legal risk. Understanding the sources of legal risk is at least as important as understanding the component parts of a detailed definition. Only in this way can we understand why legal risks arise in the first place. Developing such an understanding is crucial to designing systems and procedures intended to manage the risks. The sources of legal risk include the behaviour of financial institutions (i.e. limited legal awareness, failure to implement legal advice, exploiting the letter of the law, and outsourcing), the nature of financial markets (i.e. financial innovation, new market sectors and convergence, and cross-border business), problems with the law (i.e. bad law, policy concerns, inaccessible law, and unpredictable judicial reasoning), and the interaction of law and finance (i.e. hard and soft law, interaction of soft law and consumerism, and globalization).
Vague Laws
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter continues the discussion of examples of legal risk, focusing on over-ambitious legislation, the Proceeds of Crime Act 2002 (POCA 2002), and market abuse. In the UK, there is a tendency pass laws with ambitious titles, that suggest they can, for example, ‘prevent’ fraud or terrorism. However, the truth of the matter is that no amount of legislation will ever eradicate bad behaviour simply by making it an offence. Over time, legislation may have an influence on moral perceptions in society and that, in turn, may affect the way a substantial number of people behave. One example of over-ambitious legislation is the POCA 2002. This law has been criticized by the Financial Markets Law Committee as giving rise to legal uncertainty, especially with regard to ‘in what circumstances conduct outside England and Wales is criminal within the meaning of POCA’.
The Essentials of Legal and Conduct Risk Management
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter first discusses the general approach of regulators to risk management. Regulators often claim that they take a risk-based approach to the regulation of banks and other financial institutions. What matters to the regulator is compliance with the substance of its enunciated principles, not merely with their form. ‘Creative compliance’ and trying to find ‘ways round’ a clearly stated regulatory principle are not options. However, legal and conduct risk can be affected simply by a change of attitude on the part of the regulator without there being any change in rules or regulations. The remainder of the chapter covers risk management principles, the scope of the risk management function, examples of risk scenarios, identification of risks, assessment of risks, monitoring, and control and mitigation.
Lawyers’ Responsibility for the Management of Legal and Conduct Risk
Authors: Mccormick Roger , Stears Chris
Published: July 2018

The importance of managing legal risk effectively has increased following the recent financial crisis. As the modern regulatory regime for financial markets (global and domestic) continues to evolve, legal risk management techniques must evolve with it. The pressure to attach more importance to ethics and culture within financial institutions will also have an effect on how lawyers do their job. Rightly or wrongly, the responsibility for checking that proper governance principles are observed is bound to fall on their shoulders to some extent. This chapter discusses the role of lawyers and the legal department in legal risk management, opinions and similar documents, document retention, and clarity of lawyer roles.
Managing the ‘Grey Areas’Standards, Scenario Analysis, and Case Studies
Authors: Mccormick Roger , Stears Chris
Published: July 2018

The management of conduct risk continues to present many challenges for financial institutions. Society expects banks to do more than merely comply with the law. Banks are expected to be ‘good corporate citizens’ and to behave ethically. One might argue that they are expected to observe the sprit as well as the letter of the law. However, financial markets thrive on ingenuity and the law allows considerable flexibility to those who are determined to ‘find a way round’ a perceived problem. This chapter revisits, in the context of risk management, the issues concerning ‘grey areas’ and explores the potential benefits of standards that set out what is regarded as accepted practice, adopted either within an individual bank or amongst a group of banks. It also suggests how one might in practice set about developing a standard.
A Convergence of Agendas
Authors: Mccormick Roger , Stears Chris
Published: July 2018

This chapter ties together the loose threads of the preceding discussions. It suggests that the role of the in-house lawyer has become further involved with risk management rather than simply the provision of legal advice. It presents some legal and conduct risk management objectives as a starting point for legal departments planning to take a ‘risk-based’ approach to its function. The role of regulators will be also crucial in managing risk, not merely as ‘supervisor’ and ‘enforcer’ in the traditional sense, but also as an effective cross-pollinator of ideas. Moreover, it is important that the Financial Markets Law Committee (along with other similar bodies) continues to perform the valuable roles of: (1) identifying concerns; (2) providing expert analysis of the relevant law in relation to specific concerns; (3) acting as an informal ‘bridge’ to the judiciary; and (4) being an authoritative voice for City lawyers when representations need to be made.