legal


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Reflecting on last week’s litigation while on the treadmill I came to some conclusions.

The ‘technical’ aspect of litigation is important, but is not actually that hard if you set about it the right way. Essentially you need to know what you need to win and then set about cross-examining the witnesses to get it. Pretty easy once you have done it once or twice. The most important thing is not to appear aggressive or nasty while you are attempting to get what you need. The second thing is to know when you have ‘got enough’ or what you need for your case.

The second aspect is simply one of form, which is easy enough to learn, when to stand sit etc.

The most important and the one that will be hard to ‘learn’ is having the balls to actually litigate in the first place. This one you can learn, but if you don’t have it naturally, then I don’t think you will ever enjoy litigation, although you may become technically competent.

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So yesterday was day 1 of the trial.

Opposing counsel had written opening submissions, which she read. I on the other hand had memorised my opening submissions and presented them orally. The Judge seemed to like that.

My client was the first witness to give evidence. No matter how much you coach them prior to this, something always goes wrong.

Anyway, stuff went wrong when the opposing counsel cross-examined. I had stuff to fix during the re-examination and I was dancing a fine line between legitimate re-examination and re-leading evidence-in-chief. I got away with it, I was challenged twice, but fought off both objections.

That was the tough part of the case for me. Cross examination of the opposing witnesses is always easier.

I’m still trying to finish closing submissions.

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Employment security is a concept that generates legal and economic controversy. This is due to the conflict between the rights of capital to run a business to its maximum profitability and the argument that employees have a right to employment security.

For people living and working in an advanced economy, viz. an economy where there is specilisation within the process of production in goods or services, then employment security ought to depend on access to a market that demands their goods or services.

The law however adds some further stipulations: that employment security can also be taken to include all factors that affect a person’s employment opportunities. These would include factors such as additional protection for limited periods if they choose to leave paid employment to raise children.

The need for employment security was summarised by Judge Perkins, who, was the Judge in my recent case.

“A heavy onus rests upon an employer before a dismissal can be validly effected. The reasons for this are obvious. The right to be in employment and earn the means to support oneself and one’s dependants is a substantial right requiring protection. There is a strong societal imperative behind this, supported by economic need for full employment as founding a strong overall economy. A position of employment is a valuable asset. Employees are the most valuable asset of any business hoping to thrive. If the employment is to be terminated it is essential that it be justifiably fair.”

Clearly the Judge is not an economist.

Employment in production, when analysed as an economic proposition, can be analysed as a series of property rights, which, lends itself to a concurrent legal analysis.

The first right enumerated is ‘the right to be in employment’. This is another way of saying that as an entrepreneur, who supplies the capital, must provide employment.

Clearly this is incorrect. I have a legal right to my property, in this case capital. There is no requirement that I subjugate that right to another who has no legal claim to my property. There can be no ‘right to employment.’

Employees are a valuable asset, but they are no more valuable than other economic inputs, such as raw materials etc. The most valuable asset is capital, without which, there is no business and no employment. Capital pays the wages of the employee.

This is clearly true, as, production takes place over time. Employees are paid before the production results in consumer goods and the capitalist can earn the market return on those consumer goods.

What the law is actually talking about is the right of the employer to discard under-performing employees. Employees who earn less than their ‘discounted marginal value product’. These employees can create losses to capital and quite rationally, the employer wants to discard this underperforming factor of production.

The law does allow this, but requires that the employer evidence this and thereby justify their dismissal. This prevents the employer dismissing employees, not because they are underperforming, but because there is a personality clash and the employer wants to dismiss on this basis.

 

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I received the judgment from the Employment Court. I lost.

I’ve only read the case once, last night, so I will obviously re-read it several more times. My first impression is that it is not a well reasoned decision in law.

It reads as a case that the law was not particularly supportive of on the facts, so let’s interpret the facts in a skewed manner.

Sound like sour grapes for losing?

Not really. This case was an interpretation of a contractual clause. The clause was highly ambiguous, if it had been clear, there would have been no case. So with ambiguity, there are a number of ways that the words can be read.

The principles and rules of law regarding interpretation provide the way in which the words ought and must be read. A number of these principles and rules were glossed over by the Judge. This would then [obviously] alter the interpretation of the meaning and hence alter the result.

More interestingly, the Judge could have closed the door on any appeal. Without boring you with the technicalities, a contract interpretation, for an employment contract in NZ has its final interpretation in the Employment Court…it cannot [only under very limited circumstances] be appealed to the Court of Appeal.

My Judge did not follow this path in delivering his judgment. He followed another path which keeps the possibility of an appeal alive. In addition he [I believe] made an error on a point of law, which, would in itself allow an appeal, and has thereby allowed two potential avenues open to pursue an appeal.

My client will obviously make the call on whether we pursue an appeal, but, that option is open, when, had the Judge been more alert to the fact, could have ended any chance of an appeal with a more nuanced judgment.

 

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Theresa May’s decision to formally trigger Britain’s Article 50 request to leave the EU in March 2017 has a huge unanswered question at its heart: Whether the request is
reversible before the two-year deadline elapses.

That sounds like a technicality. But it could change everything. If the UK can withdraw its request halfway through the Article 50 process, then this gives Britain some bargaining power in the Brexit negotiations: If we don’t get what we want, we can walk away or force the process to start over again.

But if Article 50 cannot be reversed then all the power lies with Brussels: The EU need not bother to negotiate at all — it could simply sit on its hands while the two-year clock runs down, ejecting Britain in a “hard Brexit.” An Article 50 trigger might be a trap, in other words, with only one way out.

The difference between the two positions is massive: If it is reversible, then the March trigger will start a genuine round of talks, the outcome of which is uncertain. The UK can argue to get the best deal possible.

If it is not reversible, then the March trigger is the same thing as leaving the EU.

Until recently, it had been assumed by many — including Business Insider — that an Article 50 request could be formally withdrawn any time before the two-year period ended. The House of Lords took legal advice on the issue in April 2016 and was told:

“It is absolutely clear that you cannot be forced to go through with it if you do not want to: for example, if there is a change of Government … Analysis of the text suggests that you are entitled to change your mind. … There is nothing in Article 50 formally to prevent a Member State from reversing its decision…”

That advice dovetails with the opinion of former director-general of the Council of the European Union’s Legal Service Jean-Claude Piris, who wrote in September that “Even after triggering Article 50 and notifying the EU of its intention to leave, there is no legal obstacle to the UK changing its mind, in accordance with its constitutional requirements.”

But the legal arguments in the “People’s Challenge” case heard today at the High Court raised the issue. It turns out there is no rule or precedent explicitly stating whether Article 50 is reversible or not. Barrister Jolyon Maugham has an informative blog post on the issue here. And the Financial Times’ David Allen Green outlines the issue similarly here.

It is not clear whether the judges’ ruling in the case will state a position on reversibility.

Maugham notes that the reversibility issue carries huge political consequences. The High Court case is mostly about whether Parliament should vote to formally trigger Article 50, or can the government do it on its own without a vote?

If the trigger is reversible, that would imply Parliament — or a new referendum — could vote to reverse the trigger. In other words, even if Prime Minister Theresa May did not seek approval from the House of Commons to trigger Article 50, the House could still cast a vote later, before the two-year period was up, yanking Britain out of the negotiations.

That holds up the tantalising possibility for Remainers that parliament may get more than one opportunity to block or delay Brexit.

In the more immediate future, Theresa May’s government needs to figure out whether Article 50 can be reversed before March arrives. Because if it is not reversible, then she will go into those talks with very few weapons indeed.

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I just read a ‘research essay’ purported to be a criticism of the NZ Court of Appeal decision in Jackson Mews.

So when I read, ‘criticism’ I expect to see original reasoning pertaining to the decision. Add in words like ‘misinterpretation’, ‘blurred reasoning’ and I am very interested.

Why?

Because for a student to have the gumption and balls in a ‘to be published’ critique of the Court of Appeal, well that’s worth reading.

Only it wasn’t. Put aside the spelling errors, grammatical errors and really strange sentence structures and assess the actual substantive work…and there is none.

This was not a critique. This was a summary of everyone else’s critiques. In addition, the ‘click bait’ of, ‘misinterpretation’ and ‘blurred reasoning’ was so hedged and watered down, that those words should never have appeared in the title of the essay in the first place.

Was this a total waste of time? No, as I am now aware of an issue that prior to reading, I was not aware of. So I have gained.

So how did I come by this essay from another student?

It was emailed to everyone by the lecturer. Presumably, this lecturer thought, or felt, that this piece of work was worthy of our reading.

The author, despite any criticisms of her work…is a babe.screen-shot-2016-09-13-at-5-20-00-am

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Global accounting firm PricewaterhouseCoopers is being sued for $5.5 billion (£4 billion) in a Florida court for failing to spot the fraud that led to the sixth largest banking collapse in US history.

Trustees for the Taylor Bean & Whitaker Mortgage Corporation, which went bankrupt in 2009, accused PwC of negligence in their audits of the bank’s parent company, Colonial Bank,according to a report by Courtroom View Network.

Colonial Bank also failed in 2009, costing the Federal Deposit Insurance Corporation more than $4 billion, according to a report by Bloomberg News.

Top executives of TBW faked loan data for seven years starting in 2002, sending information on mortgages that either did not exist or had already been pledged to other investors to Colonial, the parent bank. According to Bloomberg, Colonial had $1.5 billion in non-existent loans on its books by 2007, which helped drive the bank into the ground during the 2008 financial crisis. PwC gave clean audits between 2002 and 2008.

The TBW executives were jailed for the fraud, with former chairman Lee Farkas sentenced to 30 years in prison.

“Year after year, Pricewaterhouse didn’t do their job, they didn’t follow the rules and they failed to detect the fraud,” Steven Thomas, an attorney for the trustee, said in opening statements broadcast on CVN.

PwC argues that well-executed audits do not always catch fraudulent behaviour and that the firm was not the lead auditor for TBW.

Beth Tanis, lawyer for PwC, told the Financial Times: “As the professional audit standards make clear, even a properly designed and executed audit may not detect fraud, especially in instances when there is collusion, fabrication of documents, and the override of controls, as there was at Colonial Bank.”

The case started on August 9 and is expected to last six weeks.

Interesting.

The disclosure on this case will have been significant. Wading through all of the emails, documentation, contracts, etc will have taken a lot of time and effort.

$1.5 Billion is a pretty big number to miss if you are an auditor. Also, given that PwC would have been receiving substantial fees from the client, how hard were they really looking for fraud, especially given that they considered themselves not to be the lead auditor.

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