| From: | Matthew Hoyle <MHoyle@oeclaw.co.uk> |
| To: | 'Robert Stevens' <robert.stevens@law.ox.ac.uk> |
| obligations@uwo.ca | |
| Date: | 18/06/2021 11:30:21 |
| Subject: | RE: SAAMCo safe |
It doesn’t seem that the cases were heard together (heard about a month apart). It continues what seems to be a recent UKSC practice of co-ordinating judgements on similar cases and delivering them
together (ITC and Swynson; Morrisons and Barclays;
Henderson and Stoffel). Most of these judgments only include passing reference to the other, often only in one direction given that the panels and leading judge are different.
These two cases however involve significant cross referral by each of the judges, including (because there are overlapping panels) to their own (“fuller”) judgments, which not only require both judgments
to be read, but arguably require them to be read in parallel. What is worse, this will give the parties in each action the impression that their case was not decided on their arguments, but based upon considerations from and arguments made in cases they were
not party to and did not have a chance to make submissions in.
That leads to the practice we see in what is likely the next “pair” of judgments (Times Travel
v PIAC and Ukraine v Law Debenture Trust), where the parties in the latter action were able to intervene in the former and effectively get a second bite of the cherry in their arguments. But that is little comfort to the parties to the later case,
who won’t get to make submissions their.
Matthew Hoyle
Barrister
One Essex Court
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From: Robert Stevens <robert.stevens@law.ox.ac.uk>
Sent: 18 June 2021 11:18
To: obligations@uwo.ca
Subject: SAAMCo safe
A couple of cases heard together on the SAAMCo principle. Both right I think, with strong majority judgments by Hodge and Sales, with Reed, Black and Kitchin signing up. Leggatt and Burrows give
separate concurring judgments with different reasoning.
The cases were pretty straightforward, IMO, if you'd just read Hoffmann.
Manchester BS v Meadows.
Building Society seeks accounting advice from an accountant, who tell them that the wheeze of "hedging accounting" is the way to go. As a result of the advice the Society engages in some gambling
on interest rate movements via swaps contracts. The exciting accounting procedure hid how badly losing the swaps were. The regulator informs the BS that it can't use this exciting new accounting method to avoid regulatory capital
requirements. To extricate itself from its arrangements, the BS ends up closing out the swaps for £32m.
The easier one is Khan v Meadows.
Woman seeks advice on whether she carries the haemophilia gene. Doctor negligently advises that she does not. Child is born who, if the advice had not been given, would not have been, who has both
haemophilia and autism. Is the doctor liable for the costs of the autism (it is accepted that they're liable for the costs of haemophilia)?
The majority ask: what is the purpose of the duty?
In Manchester BS [34] the purpose of the advice was to enable the Building Society to adopt its exciting new business model. The BS failed to understand that they couldn't adopt this because of
the auditor's advice. So, when the regulators told them to draw their necks in, the loss was within the purpose of the duty.
Khan is really straightforward. Was the purpose of the duty assumed by the doctor (to advise about the haemophilia gene) there to protect against the costs of autism? No [68]
Lord Burrows (who cites many academics on this list) would have placed more emphasis on policy matters. Lord Leggatt would have placed more emphasis on the language of causation. The majority
don't agree with them.
The majority's approach seems to me to be clearly correct, but they add in an unfortunate six stage "test" for liability in negligence. You'd have thought they'd have learned their
lesson with so many previous "tests" having gone down in flames after launch, but apparently not.
The reason there was a seven member panel was because it had been originally thought that SAAMCo was going to be challenged (one of the panel writes a textbook very critical of the rule introduced
by Lord Hoffmann). This didn't happen, probably because the prospects for it being overturned at this point is zero. Good.
As a stylistic matter, I think it would be better if judges returned to just answering the question the facts before them pose. We have now had many cases and judgments attempting to give the "definitive"
formulation of the SAAMCo principle (which is in fact relatively straightforward, as the majority make clear).
A welcome break from the grind of marking. (And the horror of being chair of examiners. Never see how the sausages are made).
Rob
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