Nothing supreme about this court
You are never too old to admit that you were wrong.
When the First Minister and Justice Secretary launched a brutal attack on the UK Supreme Court for interfering with the Scottish legal system, I thought they were picking a fight unnecessarily. The law is the law and we are where we are, and the idea of a UK legal body having the final say over Scottish court decisions was nothing new. It has been this way for centuries. Moreover, we might actually want that court to have jurisdiction over civil legal matters and matters of UK law. For every wrong headed decision, there could be – and have been – many more which serve Scots well.
No longer. Not since they decided to take a non-literal interpretation to the meaning, purpose and application of a covenant in the case between Lloyds TSB foundation for Scotland and Lloyds Banking Group.
The UK Supreme Court recently decided to overturn the decision – made by the highest court in Scotland, the Inner House of the Court of Session, admittedly on appeal – in this case. The consequences are stark for Scottish charities and all the beneficiaries of those charities, who are some of the poorest and most vulnerable of our citizens. I won’t rehearse the arguments in the case here but instead encourage you to read about them there. I have also blogged on the case previously here.
What it means is that the Foundation will be given a tiny amount of money from the banking group instead of the millions it was entitled to. And no doubt, the group will also expect the Foundation – a charity itself – to bear the costs of the appeal.
In reaching their decision, the UK Supreme Court has decided to re-interpret the law to apply it retrospectively – which is interesting in itself – and worse, they have decided to put themselves in the shoes of the parties. All of it, frankly, smacks of bending over backwards to serve the interests of corporate greed, rather than common weal.
I have no doubt that more learned bloggers than me will take issue with my interpretation of what the Supreme Court has determined. Indeed, I might even attract a stern gaze from hundreds of miles away. Frankly, I don’t give a damn. They can’t hold me in contempt when I am already in contempt.
But speaking as an ordinary person and looking at this decision from such a person’s viewpoint, thinking about what is far, this is a shocking decision. And it is one where the application of the law has been interpreted in such a way as to benefit those who have as opposed to those who have not.
There is no doubt that neither of the parties when the deed of covenant was agreed in 1986 and subsequently amended in 1993 and then replaced in 1997 (all as a result of mergers and changes in the bank set up) could foresee a gain on acquisition and a change in those accounting rules. But to say that they should not be bound by such changes is quite jaw-dropping. The law is the law, and you – we – do not get to pick and choose which measures introduced after our birth we get to adhere to. If the law changes, we are all bound by it, simple as.
Of course, appeal courts and law lords are there to give strict application to and interpretation of legal matters brought to their attention: it is not their role to give credence to the social and economic tensions and undercurrents around them. Except we can point to any number of decisions in case law which are creatures of their time. This one is no exception.
But what it has done is ignored the fundamental reason for this case in its entirety which is that the banking group wanted to give the foundation less money because it refused to toe the line. It refused to give up its independence and become the plaything of the bank to distribute its largesse in the way, as main funding body, it wanted to. The other foundations on these islands folded under the pressure: the one in Scotland did not.
Had the foundation behaved as the bank wanted, it might well have got its £3.5 million further down the line. But it would have had no control over how and to whom to distribute the funds. There was a much heavier, less tangible price to be paid for the money and it was one the trustees of the Lloyds TSB Foundation for Scotland, to their credit, were not prepared to pay.
Worse is the realisation that the bank fought this because it could. £3.5 million, despite the woes of the Lloyds Banking Group, is chickenfeed to it. It is only a million more than it paid out in bonuses in 2010. Loose change down the back of the sofa in banking terms, yet to charities all across Scotland this money represents lifeblood. Charities are great at making little amounts go a long way and this money would have given the Foundation a firm capital base upon which to face the future, as well as an income stream to distribute to projects working in our poorest communities.
But thanks to the UK Supreme Court they have to find a different way of doing that. The Foundation took a too literal approach to interpreting its rights under its covenant with the banking group. It expected the banking group to honour the terms of that covenant, not weasle out of its legally binding commitment because things changed.
Yet, what this judgement shows is that actually little has changed. The rich get richer, and the poor get poorer. Those in charge look after themselves. And I can’t help thinking that an ultimate appeal body sitting in Scotland – as the Inner House did – might have taken a different view.
The First Minister and the Justice Secretary were right after all. The personalisation of the attacks were unwarranted but the argument has substance. Scots law is being replaced by lords’ law and no good can come of it. This one in particular, is an injustice.
And it seems fitting to recall the words of Martin Luther King that “an injustice anywhere is a threat to justice everywhere”.
Posted on January 24, 2013, in Topical witterings and tagged First Minister, Justice Secretary, Lloyds banking group, Lloyds TSB Foundation for Scotland, UK supreme court. Bookmark the permalink. 4 Comments.