bluuebunny/crossref_metadata_2025_split huggingface dataset:
Why Legal and Conduct Risks
Authors: Mccormick Roger , Stears Chris 
Published: July 2018

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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

Abstract
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.
Evidence in International Investment Arbitration
Authors: Sourgens Frédéric Gilles , Duggal Kabir , Laird Ian A 
Published: July 2018

Abstract
This book is a guide for practitioners representing a party in investment arbitration disputes, and offers academics a perspective on the practical elements affecting the treatment of evidence in the area. The book uses a comparative approach to demonstrate the points of commonality and uniformity in the transnational foundations of the law of evidence as it affects international investment arbitration, providing theoretical and practical guidance on the treatment of evidence at all stages of such disputes. It examines the rules of evidence as recognized in the traditional rules of international law; the theory and function of international investment law dispute resolution against which the role of evidence must be assessed; practical management of the evidence-gathering process in investment arbitration disputes; and what to anticipate as challenges in the gathering and pleading of evidence in these disputes. The chapters cover a broad range of evidence-based topics, including: the burden and standard of proof, presumptions and inferences, witness and expert evidence, exclusionary rules including privileged and confidential documents, and annulment.
The Bermuda Form
Authors: Scorey QC David , Geddes Richard , Harris Chris 
Published: July 2018

Abstract
The Bermuda Form, Interpretation and Dispute Resolution of Excess Liability Insurance, Second edition Providing analysis and interpretation on the construction of the Bermuda Form, this second edition also addresses the dispute resolution process and covers the legal and practical issues which arise in the international arbitration of large and complex disputes under it. The volume has been thoroughly revised to take into account the major changes in the governing New York law since the first edition, as well as significant English case law such as AstraZeneca v ACE & XL. This case has had major implications for the interpretation of issues such as the recoverability of defence costs, assertion, and proof of legal liability. The resulting trend towards brokers and insurers drafting endorsements intended to clarify intent, and the nature and efficacy of these endorsements, are also analysed in this edition. The implications for policyholders and insurers of the ACE Insurance Form 007 are also discussed at length. Providing analysis of disputes involving the Bermuda Form, particularly concerning arbitrations, this book gives access to an otherwise closed arena.
Law of Construction and Interpretation Clause
Authors: Scorey David , Geddes Richard , Harris Chris 
Published: July 2018

Abstract
This chapter focuses on Article VI.O of the Bermuda Form XL004, the Law of Construction and Interpretation Clause. Article VI.O does not merely adopt a system of law to govern the parties' contractual rights, It also engages in a profound modification of the chosen law and carves out from the corpus of New York law certain principles and canons of construction that would, from an insurer's perspective, be unduly favourable to policyholders and that might otherwise apply. The chapter discusses the structure of Article VI.O, summary of Article VI.O, prohibited principles, and the basic legal principles of construction under New York law that are consistent with an even-handed approach to contractual interpretation.
The Coverage Clause
Authors: Scorey David , Geddes Richard , Harris Chris 
Published: July 2018

Abstract
This chapter focuses on the Coverage Clause in Article I of the Bermuda Form XL004. Article I is the shortest of the major policy divisions. Despite its brevity, it provides an outline or framework of the Bermuda Form policy as a whole, including references to the most important terms, each of which is defined in Article III of Form XL004 and without which the policy cannot reasonably be understood. The Coverage Clause is central to the operation of the Bermuda Form. It describes in general terms the nature, overall scope, and fundamental principles of the coverage provided. The chapter discusses the persons and entities insured, the subject-matter of the coverage, and notice as a pre-condition to coverage.
The Occurrence First Reported Trigger
Authors: Scorey David , Geddes Richard , Harris Chris 
Published: July 2018

Abstract
This chapter first compares Bermuda Form policies to other policies such as occurrence-based policies and claims made policies. It then turns to the Bermuda Form policy's ‘occurrence first reported’ regime. Under this policy, the policyholder has sole control and responsibility for linking the occurrence to the relevant policy, via its affirmative act of giving notice of the subject occurrence to the insurer. In order to determine coverage for an occurrence, one looks solely to the policy as it exists as at the time notice of that occurrence (as defined) is given to the insurer. Importantly, that does not necessarily mean that coverage is determined according to the policy as it existed at the beginning of the relevant policy period.