Trustees beware: submit with care

The Royal Court of Jersey has recently heard an interestingapplication reported in Jersey as In the Matter of CI Law TrusteesLimited and Folio Trust Company Limited as Trustees of the FountainTrust [2005 JRC099]. The case concerned an application for directions by CI Law TrusteesLimited (the ‘Trustee’) seeking directions as tohow to respond to a judgement of the Family Division of theHigh Court of Justice in England and Wales setting aside a Jerseylaw trust (the ‘Trust’) as a sham, and orderingthe Trustee to transfer the Trust assets to the petitioner inthe English matrimonial proceedings (the ‘Wife’).     

The Proprietary Foundations of Corporate Law

Recent work in both the theory of the firm and of corporatelaw has called into question the appropriateness of analysingcorporate law as ‘merely’ a set of standard formcontracts. This article develops these ideas by focusing onproperty law's role in underpinning corporate enterprise. Rightsto control assets are a significant mechanism of governancein the firm. However, their use in this way predicates somearrangement for stipulating which parties will have controlunder which circumstances. It is argued that ‘propertyrules’—a category whose scope is determined functionally—protectthe entitlements of parties to such sharing arrangements againsteach other's opportunistic attempts to grant conflicting entitlementsto third parties. At the same time, the legal system uses arange of strategies to minimize the costs such protection imposeson third parties. The choice of strategy significantly affectsco-owners’ freedom to customize their control-sharingarrangements. This theory is applied to give an account of the‘proprietary foundations’ of corporate law, whichhas significant implications for the way in which the subject'sfunctions are understood and evaluated.     

Going to the dogs?

Corporate trustees administer assets worth billions and directorsof these trusts expect to carry on their work without fear ofpersonal liability to beneficiaries other than in exceptionalcases whose ambit is limited and well understood. The emergence in recent years of an action known as the ‘dog-leg’claim threatens this certainty. The claim is brought by beneficiariesfor breach of trust generally, directly against the trustees,where none of the usual grounds for personal liability is evenalleged. The claim relies on being able to prove that the corporate trustee'srights against directors for breach of director's duties areheld by the trustee not for its own benefit, but for the benefitof the trust. This article explains how the claims are put togetherand why, fortunately, in practice they will rarely (if ever)succeed. The recent case of Alhamrani v Alhamrani has stimulatedthis appraisal.     

Court of Appeal hears 'huge money' divorce case involving offshore trusts

On 7 March, Mr and Mrs John Charman's ‘huge money’divorce reached the Court of Appeal. Last year insurance magnateJohn Charman was ordered by the High Court to pay his formerwife £48 million in what is thought to be the biggestdivorce award in legal history. (See Trusts & Trustees,Volume 12, Issue 9, November 2006, High-value divorces and trusts,p 22, by James Freeman of Speechly Bircham LLP). James Freeman, family law solicitor at City law firm SpeechlyBircham LLP (tel. 020 7427 6584), commented on the case:

TheCourt of Appeal will rule on how parties with unusually highwealth, including offshore trust assets, should be treated ondivorce.     

Overcoming the challenges posted by technology to traditional copyright law: from Betamax to Grokster

Legal context: Dual use technology, or technology which can be used for bothinfringing and non-infringing uses, raises interesting issuesin the area of copyright law. This note analyses inter aliathe two US Supreme Court decisions on dual use technology, separatedby a gap of over 20 years—Sony v Universal Studios (1984)and MGM v Grokster (2005). Key points: Sony lays down the famous ‘Betamax’ defence—ifthe technology is ‘capable of substantial non-infringinguses’, then it cannot be challenged as infringing. Thistest had stood the test of time, and it is only recently inGrokster that there arose an occasion to reconsider its application.The Court in Grokster, borrowing from the jurisprudence developedin Patent law, recognized a novel test of liability—basedon the active ‘inducement’ to infringe. The flawin Grokster is that despite its attempt to develop new standardsfor a digital age, the ruling leaves areas of uncertainty. Practical significance: Dual use technology has become ubiquitous in this age—fromthe iPod to YouTube to P2P software, all are capable of beingused in lawful as well as unlawful ways. Legal pronouncementshave the potential to impact not just the development of law,but also innovation in technology. Some believe that the ‘brightline’ of Sony has been muddled thereby threatening technologicalinnovation. Others, me included, believe that Sony is inapplicablein the face of new technology, and hail the decision in Groksteras a positive step forward in what it actually decides. However,in what it does not decide, Grokster still represents a lostopportunity by the Court to clear up the muddled waters.     

Great Expectations: The Implementation of the Rome Statute in Italy

This article first explores whether Italy is under an obligationto implement the Rome Statute that it ratified in 1999. It thenidentifies the general sets of inconsistencies between Italianlegislation and the Rome Statute and analyses whether and towhat extent the former needs to be amended or integrated inorder to implement the substantive provisions of the latter,in particular in relation to the definition of crimes, generalprinciples of criminal responsibility, defences and other barsto prosecution. Finally, the exercise of jurisdiction by Italiancourts over crimes in the Rome Statute is discussed in the lightof the principle of complementarity on which the jurisdictionof the International Criminal Court is based.         Mere dreams,mere dreams!         W.B. Yeats,Meditations in Time of Civil War, I (1928)     

Does Dworkin Commit Dworkin's Fallacy?: A Reply to Justice in Robes

In an article entitled ‘Dworkin's Fallacy, Or What thePhilosophy of Language Can't Teach Us about the Law’,I argued that in Law's Empire Ronald Dworkin misderived hisinterpretive theory of law from an implicit interpretive theoryof meaning, thereby committing ‘Dworkin's fallacy’.In his recent book, Justice in Robes, Dworkin denies that hecommitted the fallacy. As evidence he points to the fact thathe considered three theories of law—‘conventionalism’,‘pragmatism’ and ‘law as integrity’—inLaw's Empire. Only the last of these is interpretive, but each,he argues, is compatible with his interpretive theory of meaning,which he describes as the view that ‘the doctrinal conceptof law is an interpretive concept’. In this Reply, I arguethat Dworkin's argument that he does not commit Dworkin's fallacyis itself an example of the fallacy and that Dworkin's fallacypervades Justice in Robes just as much as it did Law's Empire.     

Comparative advertising and celebrity photographs--fair dealing under the CDPA 1988

Legal context. Legal context. This article reviews the conceptof ‘fair dealing’ under Copyright Designs and PatentsAct 1988, section 30. It does so in the context of to recentcases concerning the fair dealing defence, IPC Media Ltd v NewsGroup Newspapers Ltd and Fraser Woodward Ltd v BBC are considered. Key points. The traditional approach of courts to ‘fairdealing’ is based upon a number of ‘factors’considered relevant in determining whether a use of a copyrightwork is fair. The article argues that there are a number ofproblems with this approach. In particular, it claims that theapproach is unsystematic and rests upon a number of questionableassumptions. It suggests that the decision of Hart J in IPCMedia Ltd demonstrates these problems to a very significantdegree. In contrast, that of Mann J in Fraser Woodward Ltd provideswelcome guidance on the application of the concept of fairnessin certain cases. Practical significance. The criticisms made in this articlehighlight a number of discrepancies in the existing case lawand suggest a need for closer consideration and greater disciplinein decision-making in this area.     

Freakonomics: Scholarship in the Service of Storytelling

Freakonomics: A Rogue Economist Explores the Hidden Side ofEverything by Steven D. Levitt and Stephen J. Dubner is certainlypopular. Indeed, my search for something comparable took meback more than 120 years.¹ Even with the uncertainty about whatconstitutes a best seller, it is clear that the book has reacheda huge audience, especially for a book about "economics." AsI write this, it has been on the New York Times best-sellerlist for 46 weeks, and having started on the Publisher’sWeekly Hardcover Nonfiction best-seller list in the 12th positionon April 25, 2005, it has hovered in the top ten thereafter.Moreover, as reported on the Freakonomics web site, the bookhas garnered a large international audience, and the book ison various "best of" lists. Levitt and Dubner have sought abroad and diverse audience for their collection of stories:Levitt has been on "The 700 Club" (a talk show by conservativebusinessman and religious broadcaster Pat Robertson) and "TheDaily Show with Jon Stewart" (a center–left parody ofthe news and news reporting) among other places. Both the authorswrite a column for the New York Times Magazine as well as participatein an active blog (just navigate from the book’s web siteto the URL http://www.freakonomics.com, where, among other things,they respond to a large number of readers’ inquiries²).The book comes complete with more than 20(!) pages of referencesand citations as diverse as a radio talk show caller’sunverified claim that her niece was named "Shithead" (pronouncedSHUH-teed) as well as Kenneth Arrow’s "A Theory of Discrimination"and includes a two-and-a-half page tabulation of average yearsof mother’s education by child’s first name. Theextensive footnotes should not mislead: Freakonomics does nottake its subjects very seriously. In Freakonomics, Levitt’sscholarship and the scholarship of others are put in the serviceof telling a "good story" rather than the other way around.Indeed, if the many reviews of the book are any guide, manyfind the book "entertaining" even if they felt that "Levitt’sonly real message is to encourage confrontational questions"(Berg, 2005). One reviewer found the stories so compelling thathe went so far as to suggest that "criticizing Freakonomicswould be like criticizing a hot fudge sundae" (Landsburg, 2005).     

The Best Interests of the Child? Is the Best Interests of the Child in the Best Interests of Children?

The writings of Goldstein, Freud and Solnit, particularly someof the concepts they developed, have exercised a profound influenceon our thinking about children. A new, revamped, final, authoritativeedition presents the opportunity for critical re-assessment.The author finds a partial analytical framework, a dated imageof children, a narrow concept of children's rights, triggersfor intervention which leave children dangerously exposed and,above all, a sense diat events have moved on leaving the mostinfluential text of this generation firmly rooted in the ideas,problems and concepts of the last. The publication in one revised volume of the landmark trilogyof Beyond, Before and In¹ provides an excuse, if one were needed,to assess the impact and re-evaluate the arguments containedwithin the three monographs and now compressed and updated.Whether or not one agrees with all, or even any, of the ideascontained within Best Interests (as I shall now call the collection),and I shall criticize both applications and implications, theconcepts have impressed themselves, perhaps indelibly, on ourthinking about children. Like it or not, anyone thinking aboutchild law or policy, the relation between parents and children,the state and family, has to grapple with concepts like ‘leastdetrimental alternative’, the ‘psychological parent’,a child's sense of time and others of the rich ideas which permeateBest Interests.²     

Gaining confidence in the law of confidence

Legal context. The recent case of EPI v Symphony has left theUK law of confidentiality in an uncertain state: the extentto which recipients of confidential information may be permittedto ‘use’ mixtures of such information with publiclyavailable material remains unclear. The Court of Appeal in EPIfelt that it was hard to reconcile the principle that any claimin confidence must fail if the material in question is in thepublic domain with the ‘springboard’ doctrine; butis the distinction illusory? Key points. Issues raised in this case include considerationof what precisely is ‘use’ of confidential information,when mixed with public information, and whether a confider shoulddo more than rely on confidentiality obligations to protectthe fruits of his/her disclosures. This article asks how confidentialityobligations may be aligned with the control of statutory intellectualproperty rights. It considers whether the Court of Appeal inMarkem v Zipher has confused the issue and speculates as tohow far the general law of contract can assist the confider. Practical significance. Finally, this article discusses whichlegal tools will best assist the confider seeking to protectits intellectual property.     

The ongoing design duty in Universal Music Australia Pty Ltd v Sharman License Holdings Ltd Casting the scope of copyright infringement even wider

The Australian Federal Court case of Universal Music AustraliaPty Ltd v Sharman License Holdings Ltd (‘Sharman’)¹is the latest in a series of peer-to-peer (P2P) filesharingcases from various jurisdictions that has found the softwaredistributor/technology provider liable for copyright infringement.² Sharman followed a few months after the groundbreaking US SupremeCourt case of MGM Studios v Grokster Ltd ³ (‘Grokster’)that had acknowledged the Sony safe harbour for technology providersbut also introduced an inducement of infringement doctrine todeal with reprehensible conduct of infringers. While both cases involved similar technology and shared a numberof similarities on the facts and legal principles⁴, a closerexamination of Sharman shows that the net of copyright infringementin P2P filesharing is cast wider than that in Grokster. The effect of Sharman is an increased burden on the technologyprovider and the potentially tremendous consequences on innovationdue to the lack of a clear safe harbour as well as the wideningof the design obligation.     

Moving beyond the law: foreign pressure and the politics of piracy in China

‘A book may be good for nothing; or there may be onlyone thing in it worth knowing; are we to read it all through?’(Samuel Johnson) This section is dedicated to the review ofideas, articles, books, films and other media. It will includereplies (and rejoinders) to articles, the evaluation of newideas or proposals, and reviews of books and articles both directlyand indirectly related to intellectual property law.

The Politics of Piracy – Intellectual Property in ContemporaryChina By Andrew C. Mertha, 2005, Cornell University Press Price:US$32.50, Hardback, ISBN: 0801443644. pp. 258   Criticism and proposed solutions surrounding China's ‘intellectualproperty problem’ in many cases have been     

Civilized Squatting

This article seeks to trace the origins of the requirement thata squatter must have an intention to possess (animus possidendi)in order to establish title by adverse possession. The requirementhas been confirmed by the House of Lords in the recent caseof Pye (Oxford) Ltd v Graham [2003] 1 AC 419. Its origins canreadily be traced back to the decision of the Court of Appealin Littledale v Liverpool College [1900] 1 Ch 19, but thereis little evidence of any need for intention before that case,and no convincing authority is cited for it. Possible explanationsfor the source of this requirement are considered by the article(for instance cases on re-entry by landlords and the so-called‘found chattel’ cases), but these are ultimatelyrejected. The article goes on to suggest that the reason forthis is that the intention requirement was ‘imported’into English law from German Pandectist writers of the nineteenthcentury. It suggests that Littledale was the case in which thishappened. It seeks to support this hypothesis by reference tobiographical details of Lindley MR, who gave the leading judgmentin Littledale, and who not only trained in part in Germany butalso took an active interest in German scholarship of the time.A brief survey of the relevant German sources is undertaken,focusing primarily on the work of Savigny, but also consideringthe rival theory of Jhering. Finally, it tracks the developmentand refinement of the content of animus possidendi, first by19th century legal scholars and then by 20th century judges,to make it ‘fit’ with English property law. It seeksto address the question of whether the animus possidendi requirementis a free-standing element (the ‘strong’ will theory),or whether it is simply implied from the acts of the squatter(the ‘weak’ will theory), and suggests a solutionby reference to the German sources and later English cases.Finally, it considers how the House of Lords decision in Pyereflects the logical culmination of the acceptance of this ‘legaltransplant’ into the common law.     

A Critical Appraisal of 'Triple Divorce' in Islamic Law

The issue of the ‘triple divorce’ is regarded ashighly sensitive among the Muslims, not only in India but elsewhere.The Holy Qur’an is very cautious in matters of divorce.Three talaqs have to be spaced over a period of 3 months togive husband and wife time for reconciliation through the interventionof relatives and friends. Moreover, talaq can be pronouncedonly when the wife is in a state of tuhur, ie purity after menstruation.Yet, despite clear Qur’anic injunctions to the contrary,immediate triple divorce is permitted, destroying marital lifein one breath. The practice of immediate triple divorce is widespreadamong Sunni Muslims and has legal validity. Even then the juristscall it a talaq-e-Bidat (innovative form of divorce). The disputehas been highlighted by reports of some Muslims instantly divorcingtheir wives by mail, over the telephone, and even through mobilephone text messages. This article explains the different theoriesof divorce prevailing in the contemporary Muslim world and whatchecks and restraints have been imposed by Islam over the exerciseof husband's power of talaq. The article critically appraisesthe ‘innovative triple divorce’ by examining whetherit is sanctioned by the Holy Quran or the sunnah and if thereis a consensus of opinion (ijma) on the effectiveness of tripledivorce.     

Treaty Interpretation and the WTO Appellate Body Report in US - Gambling: A Critique

‘Before the game begins players should agree on a dictionaryto use in case of a challenge.’ (from the Official Rulesof SCRABBLE®)

Treaty interpretation in WTO law continues to represent a topicof highly theoretical and practical importance. The Panel’sand the Appellate Body’s reports in the recent US –Gambling dispute have critically turned on ascertaining themeaning of the United States’ GATS Schedule and ArticleXVI GATS on the basis of the public international law rulesof treaty interpretation as codified in the Vienna Conventionon the Law of Treaties. The paper’s principal aim is toreview the interpretative approach followed in particular bythe Appellate Body in reaching its decision in US – Gambling.Its main argument is that, although the Appellate Body appearsto be trying to emancipate itself from a rigorous textual approach,it has not yet embraced a holistic approach to treaty interpretation,one in which the treaty interpreter looks thoroughly at allthe relevant elements of the general rule on treaty interpretationpursuant to Article 31(1) of the Vienna Convention.     

The Morals and Order Exceptions in WTO Law: Balancing the Toothless Tiger and the Undermining Mole

On 10 April 2007, the United States requested consultationswith China regarding trading rights for publications and audiovisualproducts. Following US—Gambling, this case is likely toprovoke the next clash between free trade and public morals.This article takes an abstract approach to the scope and contentof the public morals and public order exceptions in the GATSand the GATT and, given the absence of a public order exceptionunder the GATT, analyzes how these two concepts interrelatewith one another. In this regard, the finding in US—Gamblingthat Members should individually define the scope of ArticleXIV(a) GATS is critically examined, but the article suggeststhat it deserves support based on an interpretation in accordancewith general principles of the law of treaties. Following theidentification of instruments that limit the risk for abuseof the morals and order exceptions, the article will turn tothe scope-related aspect regarding the justifiability of ‘extraterritorial’measures.     

Hastings-Bass: the true and the spurious

In his article in Trusts and Trustees, 2007, volume 13, No 7,Dakis Hagen discussed the increasingly widespread application,and the uncertain limits, of the ‘Unruly rule in Hastings-Bass’.In this article, co-editor Tony Molloy QC questions whetherwhat has come to be called the Rule in Hastings-Bass is anythingmore than a baseless snare.     

International Law and Detention of US Asylum Seekers: Contrasting Matter of D-J- with the United Nations Refugee Convention

US refugee law reflects an ever-increasing conception that theapplication of international standards would constitute an unacceptablerisk to national security. CSR Article 31(2)’s requirementthat refugees ‘shall not’ be detained unless ‘necessary’appears among the chief casualties of such suspicions. US jurisprudenceremains strikingly devoid of reference to Article 31, and 2003’sMatter of D-J- is a prime example. D-J- was an administrativedecision in which the US Attorney General held that nationalsecurity required all US asylum seekers who successfully arrivevia boat must be subject to mandatory detention throughout thecourse of removal proceedings. Despite US accession to the Protocol,Article 31(2) was not mentioned. This article explores what might have happened to D-J- if theRefugee Convention had indeed been applied to his case. Utilizingthe international methodology for treaty interpretation, itapplies Article 31(2) to various aspects of the Attorney General'sdecision. Part 2 argues that under the Supreme Court's CharmingBetsy rule, statutory discretion to detain must be interpretedconsistently with US international obligations. Part 3 concludesthat Article 31(2) of the Refugee Convention grants asylum seekersa right to release whenever their detention is not ‘necessary’.Part 4 proposes a three-part ‘pyramid’ approachto explain the elemental phases of the decision to detain anasylum seeker and examines necessity at each stage. Finally,Part 5 discusses Article 31(2)’s implications regardingevidence and proportion. The premise throughout is that, hadit been applied, the Refugee Convention could have protectedthe interests of both D-J- and ‘national security’.     

Dutch Courts' Universal Jurisdiction over Violations of Common Article 3 qua War Crimes

On 14 October 2005, The Hague District Court sentenced two Afghanasylum seekers for their role and participation in the tortureof civilians during the Afghan War of 1978–1992. The Courtheld in both cases that it had ‘universal jurisdiction’over violations of Common Article 3 of the Geneva Conventionsand that the accused were guilty of ‘torment’ (‘foltering’)and torture as a war crime (‘marteling’). The jurisdictionalbasis relied upon by the Court and the Court's legal reasoningin both cases is open to criticism.