Waiting for Godot...or ABS?

October will pass without Alternative Business Structures and it looks likely it will be the end of the year before we see them, unless you are a licensed conveyancer that is. In part this is due to the way parliamentary business is done and also to the manner in which appeals against Solicitors Regulation Authority decisions will be conducted. There is also the vexed question of what criminal convictions have to be disclosed by potential investors in ABS.

I'm sure we'll get there in the end even if parts of the legal profession wish this would all go away.

I was struck by Dan Bindman's column on Legal Futures, "Are you an ABS optimist or pessimist?" It's worth reading for the views represented on the potential effects of ABS. Dan ultimately says,

One thing is certain: the new entrants will have little regard for broader notions of access to justice, or the social value of having an independent legal profession to police the three-way interface between the state, the market and the individual.

We don't know this of course. And Dave Edmonds, chair of the Legal Services Board, comments,

Dan Bindman’s article poses the right questions. But I quarrel strongly with his assertion that new entrants will “have little regard for broader notions of access to justice”. Why will they not? Many of the most ambitious and innovative lawyers operating in the present marketplace have a very high commitment to this fundamental cause. My belief is that extending the ability of citizens to secure affordable legal advice from new forms of law firms (which will be in the main run by lawyers and properly regulated by regulators for whom access to justice is an underlying principle) will enhance access to justice, not diminish it.

Read the other comments also--there's good stuff there.

When it comes to dynamic change the legal profession has always been in the vanguard of resistance. It's almost a reflex action. Legal aid was resisted when introduced in the 1940s. Then lawyers learned how it would benefit them. They love it now! But that's going.

Lawyers were opposed to neighbourhood law centres because they thought they would take away business. Instead they promoted it. Their funding is being cut now.

The legal profession has a good eye for resisting winners and on that basis I think they might be on to something with their opposition to ABS. Just don't leave too late...

Waiting for Godot...or ABS?

Is Solicitors from Hell a Conspiracy Against the Legal Profession?

(thanks to Byfield)

As I came out of the BBC yesterday with Des Hudson*, the chief executive of the Law Society, he said Rick Kordowski was a criminal. I reminded Des that the police didn't think so. He wasn't happy.

We'd both been invited to discuss Solicitors from Hell on Radio 4's You and Yours consumer affairs programme. For those of you who might not know Solicitors from Hell allows disaffected clients to write their stories about their dissatisfaction with their lawyers. At times the voices are plaintive, frustrated, and upset. A number of lawyers have sued Kordowski for defamation, except he's got no money. And recently a judge suggested the Law Society and the Bar Council take action against Kordowski and his website.

The BBC has put the story and the difference between Des and myself on their news website. You can listen to our discussion here: we are Chapter Three.

My view is quite simple. Whatever one thinks of Kordowski or his website, it serves a need. It demonstrates clearly that people need an outlet to express their feelings and concerns about how they are treated. Instead of attacking Solictors from Hell the Law Society should be doing something about those complaints. It should be preventing the need for a website like Solicitors from Hell. If there's no felt need, then no SfH.

Lawyers are improving their game--don't get me wrong--but far too slowly. In the first six months of setting up the new Legal Ombudsman received nearly 40,000 calls which turned into close to 4,000 complaints. And there is a backlog as well. But that's far too many complaints for a profession to have landing on its doorstep. It's still not an easy process to complain about bad legal services. It could involve the Ombudsman or it might the task of the Solicitors Regulation Authority. Certainly the Law Society website doesn't make clear about how to go about complaining except to give a link to the Legal Ombudsman. Take a look at its website home page and see how easy it is to locate the complaints section. It's not.

This is one of the reasons why government decided the professional bargain was no longer working and passed the Legal Services Act in 2007 and established an entirely new regime of regulators for the legal profession and legal services market. Professions have to be accountable to the public.

--------------------------------------

*Here's Des in a better mood and you can read previous posts on Solicitors from Hell from March, April, and June.

Is Solicitors from Hell a Conspiracy Against the Legal Profession?

82nd Session of the Philosophical Foundations of Law and Finance (15 July, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Dear all,

Have you ever wondered why the world monetary system walks the path it does, a segment of which we are living in? Do you ever wonder whether there is indeed an invisible hand that "puppets" the world's monetary system and certainly not behaving in the pattern of the famous Adam Smith's invisible hand? Theories of the "invisible hand" have famously circled the world for hundreds of years either as part of scientific argumentation (e.g. the human drivers) or conspiracy speculations (e.g. clans of new world order). However not so known to the ordinary man, but at the same time so intriguingly powerful, comes the speculative statement that such an invisible hand exists and it is called the Exchange Stabilisation Funds (ESF). With its unaccountable authority to no one else, except from the President and the Secretary of Treasury, its hand on the gold reserves of the United States, its institutional influence on the world monetary policy (IMF, World Bank) and its legal authority to "....provide financing to foreign governments", among others, it is difficult to be sceptical about the supremacy of such a hand. 

Congress created the ESF with profits from the nationalization of gold—and adjustment of the gold standard for the dollar—in the early 1930s. With the passage of the Gold Reserve Act, the government stash increased in value by $2.8 billion; most of that money was then diverted into a new fund to help the Treasury manage the exchange value of the U.S. dollar in times of crisis by buying and selling foreign currencies without congressional approval.

ESF funds are devoted not solely for foreign exchange. The secretary can, with the approval of the president, use the money to "deal in gold, foreign exchange, and other instruments of credit and securities." (i.e. ANYTHING on securities market) 

Some sources to further intrigue our curiosity:

http://www.slate.com/id/2200816/

http://en.wikipedia.org/wiki/Exchange_Stabilization_Fund

http://www.youtube.com/watch?v=mj_lSydKB8M

http://www.youtube.com/watch?v=2ssrcD5GdPQ 

http://www.treasury.gov/resource-center/international/ESF/Pages/esf-index.aspx

Afterwards can head for drinks at the beautiful bar at the Langham's hotel. See you tonight.

82nd Session of the Philosophical Foundations of Law and Finance (15 July, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

80th Session of the Philosophical Foundations of Law and Finance (24 June, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Dear all, 

1. This is the third lecture by Joe to re-characterise and translate Hohfeld's analytical jurisprudence into an n-Categorical algebra.

2.  There are many symmetries embedded in Hohfeld's octonic discrete projective mapping which are really dual quatronic. In a previous lecture we showed how Hohfeld himself perhaps unconsciously missed perfecting his beautiful gem, indicating that he was not fully aware of the deep symmetries of his model.

3.  Is it not obvious that Hohfeld's 8 legal relations constitute a set? But sets tell us nothing of dynamic structures; they order but do not inform.

4. In the lecture, we explain how the 8 legal relations as jural opposites and jural correlatives relate to category theory. We dig even deeper and ask why this must be so.

5.  We show how the 8 legal relations are idempotent endomaps in the framework of jural opposites of a single human being, ie, in the monadic.

6. To map jural correlatives, however, we must use functors which are defined as morphisms which preserve in a one-for-one correspondence the objects and morphisms of two categories. Or, simply, a functor is a morphism between categories.

7.  One big result is that jural correlatives are not idempotent endomaps but rather isomorphic free and forgetful functors between categories of individuals (monads).

8. Not lazily resting on this discovery, we hypothesize (1) that systemic risk and the great cycles of default are left and right adjoints of pre- and post-default subsystems and together form a Dun Scotus-like fourfold cyclic symmetry; and (2) that short cuts through the great cycles of default via tinkering financial regulation only accelerates the centrifugal forces against the good.

See you soon, 

Rezi & Joe

80th Session of the Philosophical Foundations of Law and Finance (24 June, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Proof It's Time to Teach Ethics--Part Deux

(thanks to New Yorker)

Proof It's Time to Teach Ethics--Part Deux

Proof It's Time to Teach Legal Ethics in the UK...

City law firms are ticked off because government legal procurement doesn't seem to be going their way. Legal Week reported on government's reliance on one or two firms for its banking crisis work, well, mostly one--Slaughter & May. During the Northern Rock crisis it billed government £20 million in fees.

The latest beneficiary is Freshfields, which isn't on the panel, and partner Barry O'Brien of Marks & Spencer conflicts of interest notoriety.

However, what really intrigues me are the comments following the article. They represent the polar extremes of formalism and professional responsibility. My take is that lawyers are superb at avoiding accountability but then their forensic training ensures they make these distinctions. For example, the way the SRA Code of Conduct is used to justify positions is rather like the way evangelical preachers on TV use quotations from the Bible. In a country where legal ethics is not properly taught, now is the time.

I've added the comments below:

Sick

I think that lawyers are the last people who should be moaning about this since they were partly responsible for causing the financial crisis and have never been punished for it. The law is not just something for partners to make money out of – it was designed as a system to govern and protect society. That includes lawyers involved in corporate and banking law.
In respect of the complex financial products and mechanisms that were created during boom times e.g. securitisation etc and the complex deals that took place, it was the responsibility of lawyers to advise their clients that these could end up in a financial crisis scenario. The lawyers should have been alert to the fact that, although operating in a soft law type environment, these deals were harmful to principles such as market confidence, protection of the consumer, as well as protecting the system as a whole. It was the lawyers' duty to deter the clients from conducting these deals and they should have reported their concerns to the Government, FSA and international bodies and refused to act for the client. A client may well think these deals are smart, but it is for the lawyer to consider the legalities – that does not just mean loyally making it happen for the client so they can bill and buy an Aston Martin, but also looking at the bigger picture.

So City lawyers are reaping what they have sown here. And if lawyers wish to argue that they could not anticipate the financial crisis then that is more reason to say they are responsible and should be brought to book because it would be negligent for any lawyer advising on finance deals to not have a firm grasp and understanding of economics related to the deal and how the deal fits into the economic system as a whole within that economic climate (e.g. a boom period).
And £20m is sick – why on earth don’t the government deal with this in-house, probably at 1/10 of the cost? And why are these firms on any kind of a panel in which they initially advised on the deals and the institutions that went belly up? This is another example of the David Cameron 'jobs for the boys' mentality that the current Government promote (i.e. work for the Eton and Westminster School alumni, stuff the rest). It is a total disgrace.

Megatron -16 Jun 2011 | 13:13

A few facts

Megatron

Clearly facts aren't your strong point, but the panel was created by your friends in the last government. Do you remember? The ones who set up the system of financial services regulation and who advocated "light-touch" regulation. The ones who virtually bankrupted the country. Do try to retain some grasp on reality.

Rant over -16 Jun 2011 | 14:59

Cleansing the Augean Stables

Megatron,

Let's get it all out in the open. Where were the lawyers when the Japanese earthquake struck, eh? Didn't they warn Tepco about the risks of water-cooled reactors?
What about Southern Cross? Shouldn't they have predicted the squeeze on local authority spending and refused to act for Blackstone on the freehold sales?
When Cardigan ordered the charge of the Light Brigade, shouldn't the lawyers have known what would happen and injuncted the Russian guns?
I'd be interested to hear your thoughts.

Scattergun -16 Jun 2011 | 15:34

@Megatron
I can only assume that you are not a lawyer. If you are a lawyer then you clearly weren't listening in your conduct classes. Rule 1.04 "You must act in the best interests of each client." Not in the interests of the country. Nor of the government. Nor of Mrs Miggins.
Your duty as a solicitor is to help your client achieve its aims within the law. It is not and never has been a professional duty of a solicitor to second guess his client's commercial decisions and aspirations or to place his own value judgments about a transaction's social utility above the interests of his client. Those are the responsibility of financial regulators, not solicitors in private practice.
Your position is just a commercial law version of the old canard put to criminal lawyers: "How on earth can you defend rapists/paedophiles/armed robbers etc?" And the response is just the same: they are entitled to legal representation and their lawyers are bound to act to the best of their abilities in the client's interests (and not society's at large). It's a fundamental premise of the rule of law.

Vercingetorix -16 Jun 2011 | 18:17

Maths

@ Vercingetorix

I don’t think you are a lawyer either to be honest based on what I just read. Lawyers are not allowed to represent rapists and paedophiles if they are guilty and then try to claim they are innocent. I think you are missing the point. FSMA said that financial institutions had to act in the interests of market confidence, protection of the consumer, as well as protecting the system as a whole. Therefore, law firms had to assess whether the deals breached those rules and if they did (which clearly they did) they should have refused to act for the client and reported to the FSA and Treasury that financial institutions were conducting deals and activities with huge systemic risk implications. So, these deals were not "within the law" (as you claim) otherwise there would not have been a financial crisis would there?
As for quoting the code of conduct by the SRA to justify City firms' oversights in regard to those deals. Please! The SRA is protectionist toward large City firms – They wouldn't dare invent a Code that might in any way, shape or form offend a City firm.
Also @ Vercingetorix - I think it was stated that the law was "not designed" in the interests of City firms and partners. I don’t think people like Plato really put much though into creating a legal system designed to help partners get a good PEP every year!
The incompetence of the lawyers point is interesting too. How could these lawyers spot systemic risk dangers? Many of the clients (i.e. employees of these banks) have very technical and high level economics and mathematics degrees. There is no way the majority of lawyers working on those deals have anywhere near those intelligence levels. There is an argument that the lawyers were not trained properly to work on those deals (from an economics perspective) and that their knowledge was limited to working with precedents and writing board minutes. This should fall at both the door of the advising partners and the SRA / Law Society for allowing lawyers to act on deals that they don’t have the technical expertise to understand.

Maths -17 Jun 2011 | 10:13

@Maths
Where in my post did I say lawyers could assert innocence on behalf of clients they know to be guilty? I didn't.
But even if they do know of a client's guilt, they still defend their client. It is quite possible to test the prosecution's evidence and find it wanting such that a client is acquitted without ever asserting a client's innocence. It happens every day in criminal courts up and down the country.
You really were asleep in your ethics classes weren't you?
As to the rest, you seem to be completely confused as to the difference between a City solicitor and a financial regulator. One is not the other.

Vercingetorix -17 Jun 2011 | 12:39

Maths

Time to re-read FSMA, Maths. The FSA has those obligations ("objectives" in fact), but financial institutions do not.

Sarpedon -17 Jun 2011 | 12:46

reality check

Reality check: the regulators should have regulated. Or worst case the banks should have seen what was coming. Legal advisers advise on, shock horror, legal issues. Financial institutions advise on, shock horror, financial issues. Admittedly there is some crossover, but to assert that lawyers shouldn't be working on deals that they don't 100% understand from an economic perspective is frankly absurd and highlights a 'bash the banker/lawyer' attitude promulgated by a government that fundamentally failed to protect the economy.

People are out for themselves. It is the responsibility of the government to check this, unless something is actually unlawful (which everything referred to above was not, it was merely inadvisable). If it were unlawful, only the government could have made it so.

reality -17 Jun 2011 | 14:56

-------------------------------------------------

A friend sent me another picture of a lawyer at work which I thought I'd include here. Indeed, it's quite accurate....

Proof It's Time to Teach Legal Ethics in the UK...

79th Session of the Philosophical Foundations of Law and Finance

Dear all,


For the 79th session of the Philosophical Foundations of Law and Finance (Friday, June 17 · 6:00pm - 8:00pm, Room 516, 309 Regent Street, University of Westminster), we will apply the concepts of a Categorical Algebra of Law and Finance announced in the 78th session [see notes thereto in the Facebook group] to Hohfeldian analytical jurisprudence with special reference to: (1) political phenomena and (2) categorical theory and financial instrument patents. 

Under (1), we will examine the concept of executive vision as per Ron Paul [see the YouTube video: (3) http://www.zerohedge.com/article/complete-ron-paul-highlights-last-nights-new-hampshire-debate] and note how his vision differs from Obama's in categorical Hohfeldian terms.

With regard to (2), see (4) http://www.google.co.uk/patents?id=_kKnAAAAEBAJ&printsec=abstract&zoom=4#v=onepage&q&f=false and and (5) http://www.google.co.uk/patents/about?id=7C3kAAAAEBAJ.

Sometimes, I'm asked what is the point of all this formalism, ie Categorical Algebra of Law and Finance? I guess there's a hopeful answer that goes along the path of formalism post Newton and Leibniz, where the conception of a coordinate system allowed the calculation of movement of objects, and that these systems of simultaneous equations got us amazing answers to many problems facing the development of the human species. With the quantum mechanics of the 20th century, something broke in our general view of physical calculations and ultimately, about our sense of having a genuine mathesis universalis. The great symmetrists, Herman Weyl and Eugene Wigner, the former tried but failed to pin-down quantum mechanics to a totally symmetric view with group theory and the latter, elegantly showed us how to calculate with group theory sub-atomic phenomena using Heisinberg's "ugly random symmetric matrices," could not come up with a wide enough view of nature including consciousness because basically, in my view, they placed bets on the wrong type of formalism! If only category theory had been invented in 1900 rather than 1947! [Sigh!]. Then Einstein and Poincare would have come quickly to the same conclusions! And even Hohfeld, the well-trained chemistry major, would have been able to erect a much more direct superstructure. Here's the trick I've learned in formal logic way back when I was a teenager studying under Prof Hart at the University of Hawaii, who at one time, edited Copi's standard textbook on Logic, that the more fundamental premise, the wider the applicability, but without instantiation, the framework is too wooly to be of any real use. So I've been on a long search for just the right set of premises (the Goldilocks premises) which can unlock and link. So far, category theory comes closest to the ideal. It's very useful. Instead of checking for and arguing logical fallacies, you can sketch a few straw and ball diagrams and get to the essence of quantum mechanics, special relativity, Hohfeldan analytics, Plato's Laws, Aristotle's Metaphysics, all with a bit of gracefulness and light humour.

As always, after the intensity of philosophical discussion, we can most deservedly unwind at the Galleria Restaurant at 17 New Cavendis St, from 8:30pm onwards.

Ciao
Joe

79th Session of the Philosophical Foundations of Law and Finance