Laws to repeal

BBC Radio 4 is running a listener poll on which laws ought to be repealed.

The obvious candidate is all speeding laws. They derive from an hysterical, nannying notion that speeding is the major cause of accidents. A useful paper to debunk some of the PC hysteria on this subject is Dr. North's 2001 paper, "Unsafe At Any Speed".

Current speed limits invariably are too low on open roads and too high on B and C roads. On some C roads in the North of Ireland where I am permitted by law to travel at 60mph, over 30 years of driving experience suggests to me that anything above 30mph would be negligent, given the width of the road and the limited forward visibility available. On other roads, in favourable weather and traffic conditions, 90mph is fine. Laws that fly in the face of such common sense judgements bring the law into disrepute. Drugged up, drunken, tired, emotional, reckless and unskilled driving causes accidents. We need more policing by human police; we need much stiffer driving tests, incorporating skid-pan and track training; we need regular re-testing every ten years; and anyone who wishes to drive above 70mph should be free to take an advanced driving 'awareness and control' test to prove that they are competent to do so.

Incidentally, on BBC Radio 4 this morning, a Mr. Bill Cash was somewhat disingenuous when positing a desire to "protect the public" as a motivating factor in his eagerness to repeal the U.K.'s Human Rights Act. If people are extending the Act's remit into trivial areas, there are court mechanisms to sort out such time-wasting, namely punitive costs orders against people who bring silly cases. Better that than to repeal a bulwark of individual liberty against the excesses of the executive.

Competing lawyers

The Competition Authority in Ireland has recommended changes to the structure of the legal profession in Ireland:

Summary: http://irishbarrister.com/competition.html
Full report: http://www.tca.ie/controls/getimage.ashx?image_id=1627
Sample coverage 1: http://www.rte.ie/news/2006/1211/legal.html
Sample coverage 2: The Irish Times' editorial of today states that "... some lawyers earn a great deal of money, with the average earnings for all lawyers – including the newly qualified – running at €164,023 a year."
Law Society's Preliminary Response (transcript of Morning Ireland interview): http://tinyurl.com/ynyca9
Bar Council's Response: http://www.lawlibrary.ie/viewdoc.asp?DocID=796

Comment on competition: Competition between commercial firms has never been greater. Companies appoint firms almost on a project by project basis after beauty parades; the notion of client loyalty is mostly gone, and law firms are easy scapegoats for management failings. Far from "no competition", there's almost an unseemly scrabbling for commercial work.

Some restrictive practices occur in areas outside the CA's remit; namely that Irish businesses, which tend to operate internationally, still have to endure this farce of having to retain parallel firms in different jurisdictions to deal with substantively similar issues. For instance, tax aside, a JV agreement in the US or England or Canada or even France or Germany throws up the same kinds of issues; and companies are forced to abandon lawyers in one jurisdiction with whom they have a good relationship and pass the baton to a different firm on the off-chance that there may be local issues. Often, there isn't, but you can't take the chance. Imagine if you had to hire a different IT company for every jurisdiction you operated in.

As for the need to drive down prices in conveyancing, they're already arguably too low. If I was deluded enough to buy a property at Irish prices (no mention of competition among house-builders then, arguable a more pressing issue for most people), I’d be inclined to ask the conveyancing lawyer how exactly s/he intends to check everything properly for that amount of money, unless their charge out rate has suddenly dropped to €20 per hour.

Comment on lawyers' salaries: Few lawyers, other than trainee barristers, are living in poverty; and the Irish Times' editorial has the grace to say "some lawyers", but there is still a surprising whiff of tabloid sensationalism in its lack of explicit context. Law, like acting and soccer, is characterised by salary extremes. While some lawyers earn modest wages and some earn millions, many lawyers earn un-sensational salaries. It may be that this "average" figure is skewed upwards by the unrepresentative mega-earnings of specialist corporate partners.

The Lawyer, an English legal journal, carries the widest range of highly-paid commercial legal jobs Britain or Ireland. Currently, it is advertising around 9,400 legal jobs. However, if you search by salary size, only around 30 of those jobs carry salaries above €164k. Further, of that handful of very highly paid jobs, many are in tax havens such as the BVI and Cayman Islands; and many of the rest are specialist partner positions in niche City of London practices. In other words, even in higher-paying legal jurisdictions than Ireland, only about 0.3% of available jobs offer what the Irish Times somehow suggests is an "average" salary.

They still can't blog

In a far-distant blog, I suggested that "real lawyers don't blog". My central contention has just been demonstrated in London City firm WFW's firm-sanctioned trainee lawyer blog.

Bet you can't wait - PR gushing thinly disguised as blogging. Corporate blogging is a contradiction in terms - read the report by Roll On Friday.

Why the legal services cartel is bad for business

It's a truism that a modicum of legal and accounting advice, delivered early and incorporated into a business' standard practices, helps companies avoid expensive strategic mistakes.

There are three inherent defects in the current model of providing legal services to businesses:

1. There is no such thing as pure legal advice. By definition, all legal advice is applied. However, the vast majority of those who provide legal advice pay scant attention to application. Inevitably, they view life through a narrow legal prism. Generally, they fail to appreciate that the deal would get done without them. They struggle to understand, never mind operate within, the real-world exigencies of business. Given that the vast majority of private practice lawyers have never worked in business on their own account, how can it be anyway else? You gain experience of business by doing it, not by advising on it.

2. Legal advice consists of two parts: (1) the advice; and (2) its execution inside a company. External lawyers in law firms do not understand how companies are ran and they certainly do not have a direct appreciation of the dirty, flawed dynamics of such execution. Further, they have no incentive to do so. External lawyers have a vested interest in continuing inefficiencies inside businesses. It's much more profitable if a company has to keep coming back for essentially the same advice each time a similar deal or situation arises.

3. Business is global. Legal services, being narrowly national, are miles behind reality. I have no issues with countries clinging on to their idiosyncratic criminal and civil legal systems, if that keeps them happy (the conceit that "ours is better"). However, the broad sweep of commercial and corporate laws can and should be globalised. There is no sustainable reason why, for starters, all the common law commercial systems (Ireland, England & Wales, Scotland, America, Australia, New Zealand etc) shouldn’t all be exactly the same. And there's no reason why the EU's commercial and corporate laws should not very soon after be in lockstep as well.

I could, in fact I am, writing a paper on this. Watch this space for some changes to this site by the end of 2005.

Divided and conquered - the case against sectoral industry regulators

Much talk in Ireland recently of the need for a single, so-called "super" regulator, to oversee structural competitiveness across former nationalised industry sectors. Currently, we have a stand-alone Competition Authority and separate regulators for each of, e.g., energy, telecommunications, aviation etc.

Irish Taoiseach (PM), Bertie Ahern, has today suggested that it's the"quality of decision-making by regulators" we should look at, instead of obsessing about structures. He may well have a point. That said, as someone who worked in a regulator's office - in 1999, I chaired the Irish telco. industry forum (I was told afterwards that only a madman would have agreed to do this, but it was fun in a bear-pit kind of way, and very educational) on local loop interconnnect pricing and related issues and as a consequence had very illuminating interactions with all the players.

By itself, I agree that moving towards a single regulator won't solve anything - but it would at least allow the potential for better decision-making. The current fragmented approach to regulating militates against this ever happening, for four reasons:

1. LACK OF ACCOUNTABILITY AND SCOPE FOR BUCK-PASSING. This is mainly in relation to the Competition Authority ("CA") vis-a-vis the rest. Since the main underlying thrust of all sectoral regulators is to free-up competition, where does the CA's role start and end? When I worked in the former ODTR (now ComReg), it was never clear, for instance, whether ComReg or the CA should initiate a cross-subsidisation investigation. Result: regulators dither and new businesses die.

2. DEFERENCE. A sectoral regulator, with nothing but sectoral expertise, instinctively defers, in technical and operational matters, to the former incumbent. It's hard for them not to - very often, a new regulator will know far less about a particular industry than the former incumbent. An unhealthy relationship can develop. I've seen at first hand how a former incumbent can bog issues down in a lot of red-herring minutiae - there will always be "unfortunate technical reasons" that they "understand better than everyone else". The problem is that a sectoral regulator is awed by this degree of nit-picking experience; and defers to it. This in practice always means favouring doing nothing, just in case. A regulator who was bullish in pursuit of clear principle and less inclined to waste time in rambling sub-committee debates would get better results. Paradoxically therefore, less understanding might be more, not less, useful. Sectoral regulators, as a consequence of their much-vaunted sectoral expertise, are too nervous and too easily swayed by b/s technical sub-committee "arguments" ever to achieve anything bold or decisive.

3. REGULATORY CAPTURE. A sectoral regulator affords too much weight to the former incumbent's opinions. The ingrained mindset becomes one whereby the sectoral regulator instinctively feels that the former incumbent's opinions always amount to 50% of the argument and all the other players together account for the other 50%. In other words, in effect, the former incumbent has the psychological equivalent of weighted voting rights. This means that ten new players can say one thing, the former incumbent will say another; and, instead of the regulator feeling that this is a ten votes to one situation, will feel instead that there is a "deadlock". This is a fact of life with sectoral regulators and is their most serious built-in flaw. There does not have to be any kind of corruption or improper influence; but, from the perspective of other players in the market, the effect is analogous to regulatory capture by the former incumbents. A single regulator would see each former incumbent as just another company to be regulated, and would be far less in awe of them as a result.

4. POLITICAL INFLUENCE. This happens. It does not have to be inappropriate. It's not a question of political capture. Sectoral regulators, without being leaned on by anyone, instinctively look over their shoulders continually - aware that their existence hangs on the whim of a particular Department, they tend informally to wash their decisions through a political filter of nervous expediency. It's relatively easy for a powerful incumbent and a particular Department to hold sway over a narrow sectoral regulator, without actively needing to try to do so. Sectoral regulators do not have a big picture mindset. By contrast, a unified regulator plays in a wider game, and would be less inclined to let one rogue sector upset a larger plan. Simply, as a consequence of their wider responsibilities and duties, they'd be more inclined to stand up for themselves and to take robust decisions.

If my experience has taught me anything, it's that laws that are forced to operate in a debilitating structural context will fail.

Earlier blog on telecommunications regulation here.

Law and the Germans

Without a shadow of doubt, Germans are the best people to deal with in business, followed by the Dutch and the English. As an Irishman, I don't trust my own country people an inch; and that also holds for Americans. Here’s how they rate, in my wholly subjective experience (there is no other kind):

Germans: They say what they mean. They stick to their guns. They prepare. They like to cover all the points. They can be dissuaded from a stance if you can demonstrate logically, that it is manifestly unreasonable that they should persist in it. When you do the deal it's done. They expect you to deliver. They'll sue you if you don't. They do what it says on the tin.

Dutch: Very similar (they'll hate me for saying that), though even more direct but less formal and less aggressive.

Southern English: Like the Germans, only more fun, much more polite (though can be breathtakingly rude if they have to) and more pragmatic about conceding points to get the deal done. Don't prepare as well. Superficially arrogant, but that's a style thing and isn't personal.

Americans: The most hard-nosed. Superficially, much more informal, friendly and affirmative than most other nations (the good buddy act) - while they’re evaluating you as an opportunity. This means absolutely nothing. Underneath, they're 100% untroubled by sentiment of any kind. If they have to screw you, they’ll do it, on an instant. And, when looking to get what they want, are ingeniously persistent. Finally, and this is most important, they're never satisfied with 95%. If the last few crumbs can be hoovered up, you can bet an American will try to do it.

Irish: Tend never to read agreements, largely because they don't intend to abide by them anyway, unless forced to. Will tell you what you want to hear and do the opposite. Very relaxed style, charming. Contemptuous of rules. Given to direct personal insults in meetings.

Obviously, this blog is nine-tenths provocative generalisations and deliberate polemics, but there is a serious point.

The point is communications in business, and, specifically, communications between external law firms and their clients.

Most of them are bad at it. This is because, as lawyers, we are conditioned and trained to put great emphasis on words, sometimes spoken, and usually written. Body language, intonation, things left unsaid, cultural nuances - all these go straight over the head of the average "objective" (read non-perceptive) lawyer.

I claim no expertise in this area. My brother, a very successful salesman, once looked at my selling style and concluded that I "didn't listen" and tried to "impose" my views. In a recent management day exercise at our company, we were subjected to one of those psychological tea-leaves reading exercises. I've did a few of these exercises down the years, and there may be something in them as the results are broadly consistent. I go for total honesty in such matters, not because I'm a paragon, but because my curiosity on a fresh perspective far outweighs any concerns I may have about revealing myself to be a psycho. Anyway, on a scale of 0-20, rated across several business areas, I scored very highly on "action" (19), very highly on "networking" (15), but quite poor on "quality" (5) and, surprisingly to me, a big fat zero (0) on "relationships". Zero! I queried this, slightly indignant, as I consider myself to be fairly easy-going and tolerant and able, albeit on a cynically superficial level, to do the old pals act with anyone and can chat the proverbial hind legs of a dog on any subject, anywhere, anytime. However, it was explained to me that scoring 0 in relationships did not mean I was a grumpy introvert. Far from it. You could be as loquacious, loudmouthed and gregarious as anything, and still get 0. The tests sought to measure how much importance I placed on relationships, for instance when doing business. This gave me pause for thought; and I was forced to agree that I take business decisions purely on operational and financial grounds. That's it. If the suggested course of action keeps people happy, well hey that's nice, but if it doesn't, that’s an utter irrelevancy. For me, personal preferences and personal feelings have no place in business; the people I work with are almost never my friends. In fact, unlike what I hear from most people, I work far better with you if I actively dislike you. It spurs me on. I tend to relax too much with people I instinctively get along with. So, when picking a project team to get the best result in the quickest time, if I have a choice, I’ll assemble a team made up of people that, on a social level, I would dislike.

I have reflected briefly on this, and have decided that I like my approach best; so that's that. Most business people are selfish anyway; and not the kind of people you want to get close to. Enjoyable, entertaining, but fundamentally untrustworthy, in the manner of anyone who prioritises money over friendship. That's not a cynical stance; it's how business people (with a very few philanthropist exceptions, and then only when they're closing in fast on death) simply are. If they were any way else, they'd never turn a fat profit. We need them that way.

However, it did get me thinking about the poor state of communications between external law firms and their clients. That in itself almost qualifies for a management guide that I'm mulling over, based on my various experiences managing various external law firms. In this blog, I'd simply like to highlight an instance of where, in the mid '90s, a German client (when I was in private practice) and I talked at cross-purposes for hours, without realising it. It was mostly fortuitous that we clarified matters at the end, or it would have had very negative repercussions on our working relationship thereafter.

And the key to our initial mutual misunderstandings was that, while we each knew all the surface facts of the case, we did not understand how each other's culture affected how we prioritised and were likely to deal with those facts. I didn't understand his German business culture; he didn’t understand my Irish/London lawyer culture. (I perceive that, even between law firms and clients from the same jurisdiction, each side often fails to understand the different cultures of law firms and business. They make dangerous assumptions, and, fatally, base their approach to a mutual law-firm/client project on these dangerously flawed assumptions. Each assumes that the other will react in ways that are predictable. But "predictable" to a business person means a very different thing to "predictable" for a lawyer.)

Situation was that my German client was in a bitter dispute with an Irish supplier, who, frankly, was taking liberties over deadlines and service levels. First, I asked whether he wished to maintain the relationship with the Irish supplier. He did. That was essential. Bad as they were, this Irish company was the only suitable company for this particular project, given various technical and geographical constraints. Fine. We looked at various financial and operational re-structuring methods and suggestions, and after several hours, we had thrashed out a proposal and documented it sufficiently to put it to the Irish supplier. We went straight to a meeting with the supplier, and after several more hours, got them to agree to a heads of terms to bring more structure and discipline to the areas that had been giving problems, with clear incentives and penalties where previously matters had been taken too much on trust.

It had been a long, but satisfying day. I felt I had assisted in something positive. Later, after the supplier's team had left, and my client was collecting his papers, he remarked, "So, Seán, now we can work out how to sue them, yes?" I asked what did he mean, "sue them"? We'd just completed a mutually satisfactory settlement agreement and he had assured me that he wanted to keep the relationship, at all costs. The German looked puzzled by my seeming stupidity. Yes, he said, I know that, I do want to keep the relationship, but now we must sue them.

Well. I wondered if the long day had got to the guy. It seemed, from my Irish perspective, that he was cracking up. How on earth was he going to keep a relationship with someone after he had sued them? In Ireland, that would drive a coach and horses through the relationship, and might, in country areas, give rise to feuds for generations to come. So we discussed further. "In Germany", he explained "this would not be a problem. We have the settlement agreement to take of things in the future, but now we must have the court case as well to take care of what they have did wrong up to now. The settlement agreement is very good, but it does not give us 100% compensation for all the losses we have been put to, and that is not fair." Eventually, I convinced him that he had two choices: (1) sue and (possibly) get some compensation, and torpedo the relationship – if only on the narrow legal ground of misrep; or (2) take a minor hit on past difficulties as a price worth paying for the far greater prize that lay ahead. So he agreed, once this had been made clear to him. But he clearly was surprised at how "unreasonable" and "overly-sensitive" the Irish were about such matters. To his way of thinking, it was fine to sue someone you had just reached agreement with. This to him was not arrogant or aggressive behaviour; nor was it intended to wreck a deal. It was simple justice. Logical.

But I'll guarantee one thing to you - not one of the Irish people in that settlement meeting would have had the faintest inkling that he had been planning, naturally, to sue them. But he had assumed, naturally, that I was going to do so. Had he not spoken, he'd have been annoyed with me, or if he'd been using a German lawyer, he'd have lost the relationship with the supplier.

Communications.

The interesting footnote is, that, from a vantage point of almost a decade's experience later, my position has shifted. Back then, I would have thought that suing the supplier in such circumstances would have been an un-commercial and heavy-handed legalistic way to behave.

These days, I'd do it.

Looks like more relationship zeros for me then :)

Bad news for weasel-worders - "not aware" is no longer passive

It's one thing to "warrant" that the property you're selling free from major structural defects. If you do, and it isn't, I'll sue you on the strength of your warranty. Banks, in particular, love warranties. They know they have you if your warranty is false.

I don't know any bank that would be happy for you just to state that "to the best of my knowledge, there are no defects" or that you were "not aware" of any defects. Your "knowledge" or "awareness" may be lamentable or non-existent.

If in fact you aren't aware of a defect, and there is one, that's my problem. If the defect is one that you ought reasonably to have been aware of, I'll try to get you for negligence. Messy though, as you may be able to counter with the "buyer beware" angle; and I may have problems establishing reliance.

However, a recent High Court case in England - Clinicare Limited v Orchard Homes and Developments Limited[2004] EWHC 1694 - effectively reads an active obligation into what most of us assumed had been a passively-worded legal get-out:

Facts: C intended to lease a property from O. In response to C's standard enquiries, O stated that it was not aware of any dry rot at the property, but suggested that C carried out its own survey. O had recently undertaken certain works at the property in an attempt to eradicate dry rot. The court held that O's representation that it was not aware of dry rot was fraudulent and carried with it an implied representation that O had made reasonable investigations of the matter. This implied representation was negligent as O had not made any such investigations despite being separately advised to do so. O also argued that it had corrected the implied representation by a later oral statement to C's surveyor that dry rot had been discovered in the staircase, which had been replaced. However,the court held that this statement did not correct the misrepresentation. On the contrary, it suggested that such investigations had been made and that O had taken reasonable steps to cure the problem.

Difficult to comment on facts as scanty as these. But they seem to be confusing two separate issues. If O in fact knew of dry rot, there's straightforward fraudulent misrepresentation. Fail to see where the "implied representation that O had made reasonable investigations" comes from though. What if O hadn't been a fraudster? What if O genuinely didn't know, and hadn't bothered to check?

It's a bad day for prolixity and the nanny court. We'll end up having to define what "not aware" means in the definitions section. Fraud should be the limits of any Court's concern. The world's full of honest, lazy sellers and honest, stupid buyers. Regrettable, possibly, but hardly matters a Court should concern itself with.

Changing Constitutions

Today, Irish voters are voting to accept or reject an Irish government proposal to reduce the existing citizenship rights in the Irish Constitution. This referendum has been coincided with EU-wide elections to the European Parliament.

Legally, should any politician have the right to propose an amendment without there being a prescribed initial period of public consultation; and without gaining a cross-party majority thereafter? And should any party have the right to coincide a Constitutional amendment with an election?

It's the latter aspect - coinciding referendums with general elections - that may be open to legal challenge.

In theory, it could be OK to coincide an election with a referendum. In practice, a proposing government party will have been ideally placed unfairly to influence the outcome by a "spin" campaign in the run-up period.

If that happens, then it's akin to a prior misrepresentation in a contract dispute. An "entire agreement" clause will usually seek to prevent any party who has been misled into signing a bad deal from relying on prior misrepresentations; but, following the 1995 English High Court case of Thomas Witter v TBP Industries, no entire agreement clause can prevent a duped party from putting a prior misreprsentation in issue, provided that such misrepresentation had been made fraudulently.

Irish MEP Patricia McKenna's 1995 case to the Irish Supreme Court stopped the government from actively subsidising its own propaganda and, inter alia, introduced a notion of equality between citizens, in referendums at least. But if governments are prepared to run a spin campaign in the years and months before a referendum, then they can generate more support for their position than if they had been pumping money into a PR campaign.

Whether the Irish government's piecemeal pronouncements on immigration and related issues over the last few years amount to misrepresentations or not (and, if so, whether they’re fraudulent or merely negligent); and, if so, whether they're Constitutional or not, is perhaps not an issue to consider here.

But, given what we know of modern governments’ regrettable tendencies to spin and dissemble for narrow party-political motives, it’s not inconceivable that a future Irish government may not be able to resist the temptation to profit through direct electoral association with a referendum “issue” that it has spun into prominence in the public mind.

Anti-headscarf laws in France

France is a country formed out of revolution. A revolution that involved chopping off the coiffeured heads of parasitical lords, ladies and Catholic clergy.

In that proud historical context, the French legislature's concern to maintain France's secular tradition in public life is commendable. Given the lack of reason that is, by definition, the stuff of any religion, I find any government that parades its piety to be both hypocritical and alarming. It's not that I am against the prevailing mores of any country, religious or otherwise, helping to set the laws of that country. That happens anyway. Most of the common law derives ultimately from a Biblical mindset. It's just that I tend not to believe in the bona fides of anyone who trumpets their ideological bases. Genuinely religious people demonstrate their principles through doing. But those who publicly are most vociferous about rigid doctrines tend in practice to be those who fail completely to live up to the ideals they profess. Very often, the real motive is a cynical desire to silence potential opposition by claiming divine inspiration or authority. And, particularly in the case of at least three of the world's main religions, a desire to limit and control women's economic and sexual freedom is firmly at the unadmitted, ugly heart of much of this pious posturing.

Accordingly, in a Moslem country, any woman who wears the veil, or the burka, is conforming to authoritarian dogma and precepts. In a traditional Moslem country, any woman who doesn't so cover her head is a rebel. However, when you transplant a Moslem family into an anti-Moslem racist context, the ironies multiply. Suddenly, that which might have been an imposition in your parents' country becomes an act of cultural affirmation in a minority immigrant culture where you, as a member of that minority, feel threatened and marginalised. By wearing the veil, you're a rebel. Hence the recent resurgence of veil-wearing among young French Moslem women in France and the resultant disarray in French policy-making circles.

In a recent blog, I suggested that legislative attempts at social engineering are fatuous and counter-productive. So long as the fundamentally secular tradition of French schools remains intact, how does it matter what anyone wears? However, even if the French government could manage to confound me by pointing to a compelling rationale for banning particular items of clothing in schools, what will banning it achieve?

With one stroke of a Ministerial pen, they'd make veils the hippest things around. In the eyes of the average young person, the more illegal it is, the more fascinating it becomes. They'll all be at it, Moslems and non-Moslems alike. So perhaps some welcome cross-cultural solidarity may result.

But, in this kind of context, if you want to ban something in practice, all you need do is pass a law making it mandatory.

e-voting farce

Three stages of e-voting:

1. It doesn't work.
2. It still doesn't work.
3. But this shows potential, if you're running in a marginal constituency.