Tuesday, June 27, 2006

Russian Ethics

Three articles in the Financial Times today discuss the difficulties of business in Russia. Each presents a gloomy picture. The prevailing image is that of the Wild West where might was right and law and justice were suborned.

In the first, we see Rosneft's recently published IPO prospectus which catalogues a series of dangers for investors. Among those mentioned are:

"There are weaknesses in legal protections for minority shareholders and in corporate governance standards under Russian law." Nicely understated.

"Crime and corruption could create a difficult business climate in Russia." You've been warned.

"The Russian government, whose interests may not coincide with those of other shareholders, controls Rosneft and may cause Rosneft to engage in business practices that do not maximise shareholder value." That is, you could lose the lot.

So that one is absolutely clear about this, the chairman of Rosneft's board is Igor Sechin who is deputy chief of staff at the Kremlin. He belongs to the siloviki, military and security people who have flourished under Putin. Sechin has been one of the key ideologues behind the legal attacks on Yukos.

The FT's second article reports the appeal made by Mikhail Kasyanov to the G8. Kasyanov, a former prime minister, is likely to be a presidential candidate in 2008 and he has expressed concerns about the "drift away from democracy in Russia". There is general political oppression. Also, he said:

"The judiciary cannot be said to have any sign of independence."

The last article discusses Putin's expression of "managed democracy" where the state and corporate interests combine to prevent anyone influencing their behaviour. Managed democracy means using the clout of the state as articulated through corporate entities to control the media and human rights. Gazprom owns a major TV channel, NTV, and the newspaper, Izvestia. The Moscow City Council owns another channel. These forms of ownership conspire to suppress freedom of speech and criticism. Independent journalists usually find themselves independent of any source of programming. But game shows, soaps and reality TV are hugely popular. The philosophy of bread and circuses has found an hospitable home in Russia. Managed democracy" sounds like corporatism or facism by another name.

The shining feature for the west that shines through all this is the amount of money to be made in Russia. That trumps all. It is that which brings in the investment banks and the big law firms. As the FT succintly summarises the Rosneft IPO and therefore all Russian business: "Some things are just too big to fail." Will this be the epitaph?


Can Lawyers Be Ethical in Russia?

At the start of July, Rosneft, a huge Russian oil company will launch its plans to raise $10billion on the London and Moscow stock exchanges. It seems Russian prospectuses are somewhat less than transparent when it comes to identifying the histories of companies and who actually owns them, especially other "beneficial" owners.

The prospectuses announce the usual warnings about what could go wrong plus others such as non-executive directors being charged in criminal cases, or occurrences of price-fixing. In the case of Rosneft one of its main assets was acquired from Yukos in a forced auction at a knock-down price--clearly politically maneouvred by the Kremlin after Mikhail Khodorkovsky upset Putin and ended being jailed.

Now one of the biggest tasks that advisers to potential investors in Russia have to undertake are reputation audits where, via a massive trawl through all the posssible information, some semblance of the truth might emerge.

The key thing is that prospectuses are compiled by, among others, corporate lawyers in large law firms. (If you want to see an example have a look at the Kalashnikov Joint Stock Vodka Co. (1947) plc prospectus--I couldn't find another that sounded as though it had been made up.) They know that many of these deals are murky at best, but essentially the lure of the profits to be made in the Russian energy market are too great to provide any inhibition about the bona fides of the oligarchs and others. I think it would be possible to argue that the sins of omission committed by lawyers in these situations are unethical. It's not too far-fetched to imagine a scenario where one of these deals blows up in a big way and the law firms will be implicated. Is it such a large step from Enron to a Russian equivalent? Not really. Every corporate lawyer in Russia is walking a slackwire. It's just a matter of when they fall off.

Tuesday, June 20, 2006

Everything Changes

Alan Bennett's play, The History Boys, won six Tonys recently. And in an interview with the Financial Times he talked about his diaries. Jan Dalley wrote:

The diaries of 2004 record the making of The History Boys in fascinating detail. Work apart, they are a delightful smorgasbord of sparkling mundane descriptions - trapping mice, visiting churches, making small-talk with a road-sweeper - but always with a Bennettian twist. Blackberrying along the Yorkshire country lanes he loves, the juice-stained hands of his companion remind him of a 1940s murder film.
It's the last sentence in the quotation that flummoxed me for a moment. I had an image of Bennett in a country lane responding to emails on his BlackBerry: of course it didn't make sense. Then I realised Dalley was referring to picking the fruit, which even I have done as a child.

Innocence gone--we can't read it that way any more. Everything changes....


Saturday, June 17, 2006

Engrenages (Spiral) and French policiers

French policiers are gritty. Gritty? Yes, if you look at most of the detectives very few seem to shave more than once a week. Or maybe in their case it's extreme 5 o'clock shadow. Even the women look gritty, those that are cops not the civilians.

I've just encountered my first French television detective series Engrenages (Spiral), which is showing on BBC4. It's been tucked away in a backwater to be aired around midnight and it is a great pity. Admittedly, everyone looks attractive including the criminals. Where are the obvious signifiers when you need them? For me it is closer to American detective series than English ones.

In English police/detective shows the police are shown working on their own eventually catching the criminal who just deserts are granted off-screen after the end of the programme, eg, Morse. (I suppose one could argue that Rumpole shows the lawyers in action.) In the American shows the prosecutor makes an appearance. Not always it is true, but more than in the British equivalents. In shows like Law and Order both police and prosecutors share equal billing except they tend to appear sequentially: police first with the investigation then prosecution with the lawyers.

In Engrenages both appear but in tandem. The police work very closely with the prosecutors who determine how long accused can be held for and so on. They and the prosecutors are also under the supervision of an investigating judge. For Anglo-Americans this series is educational.

The French police are shown as a combination of integrity, corruption and minor venality. In the first three episodes they encounter drug-swallowing African immigrants (who ingest their own faeces to escape capture), deaf-mute Russian hawkers being run by a gangmaster, Romanian prostitutes organised by East European pimps, and crooked financiers. I almost forgot the porcelain factory owner who, after being fisted by his lover, is killed by his exasperated wife. And the ex-alcoholic, ex-drug addict mother who hires a crazy nanny who kills her baby believing it to be evil incarnate. Phew! Keep up with that, then.

The lawyers lead lives only slightly less frenetic than the cops, but they appear professional because of their suits and ties, and careful diction. Both lawyers and cops are casual about sex. On learning that his separated wife is seeing someone else, the deputy state prosecutor, a few hours later, is saying to the pretty Chief Inspector, "Your place or mine?" No one ever accused lawyers of being original. And they chose his because his apartment is very chic.

The lawyers' roles in France are quite different to those elsewhere, especially the US. Forget zealous advocacy. Avocats (or solicitors as the English translation says) are deferential to the judge, never contradict him, and hardly say anything, even when their client is being harangued by the judge. They seem virtually complicit. It has been argued by some that continental lawyers (ie, civilians) are extensions of the state while common lawyers are creatures of the market and stand in opposition to the state. French lawyers appear to exemplify this.

One curious aspect is that of a disbarred criminal lawyer who hires a young, female lawyer to front him in cases. He wants to create a stir, but what he will gain from it is yet unknown.

I can't wait for Donna Leon's books to be converted into a television series. Venice and Italian corruption, way beyond the venal would be marvellous.

Tuesday, June 13, 2006

Transforming English Court Ideology

I've been writing a review essay for a journal of Courtroom 302 by Steve Bogira. This book has featured here before, because I believe it is one of the best of its kind. My aim is to tie it into the failure of courts to do what they are supposed to do. One of the aims is to uphold and dispense justice. I know this idealistic should have been knocked out of me in first year law school, but it didn't quite leave.

I thought it would be a good idea to compare Bogira's criminal court with the British magistrates' courts. That, however, is an easy target. What was more interesting was to compare something in the order of BCCI v Bank of England with it. Civil/criminal and high/low status. The activities of the courts and the lawyers in this case have shamed British justice. How a judge could say to the Lord Chief Justice that he thought the case was barmy and then let the lead counsel on both sides open for over 100 days beggars belief. There was absolutely no judicial control at all. The case, after years of pretrial and trial activity, has generated costs of over £100 million. Gordon Pollock QC, BCCI's lead counsel received a £3 million brief fee, the highest ever charged. Gradually, BCCI's claims deteriorated to the point they had to give up the case.

By comparison, commentators have been applauding the judge in the Skilling-Lay Enron trial for his masterly command of the courtroom and the lawyers. He moved the trial and brought it to verdict. Moreover, the prosecutors ensured that the presentation of the case was as simple as possible. They focussed on the lying of the defendants, not the accounting inaccuracies which would have lead to endless detail that would have flown above the heads of the jury.

English courts are inept. They take far too long to try cases. The BCCI and Equitable Life cases are exemplars of this. Even though the civil courts have improved procedures somewhat, it still takes a long time to get a case into court. It's just as bad, if not worse, in the criminal courts. Here too, even at the magistrates' courts level, cases can drag on because participants fail to turn up. There are virtually no sanctions if police witnesses or officials from local authorities don't appear: there's just another adjournment. Maybe if they accrued penalty points, like aberrant motorists, there would be incentives to appear. Why judges are so frightened of managing cases is difficult to understand?

English barristers are also too verbose. God, how they love the sound of their own voices! There needs to be far more judicial control over courtroom life. It can't be left to the lawyers to run. After all, many are paid on a time basis, which is a clear incentive to keep going. Judges need to be able to say enough is enough; impose time limits on case openings and closings; restrict numbers of witnesses and keep examinations and cross-examinations within reasonable limits.

Juries have the greatest difficulty in following cases, which are not presented as "normal" narratives with beginnings, middles and ends. To them a case is a series of disjointed episodes which they have to struggle to stitch together at the end. They certainly don't get any help from the lawyers or the judge.

Perhaps barristers' greatest failings have been shown in fraud trials. Both prosecutors and defence counsel think the more information they shower the jury with, the better their case is. Wrong, wrong! This is an instance of where less is more. It is the reason why Skilling and Lay were convicted. Too much information is why the British have an abysmal reputation in succeeding in fraud prosecutions. In addition to which when the prosecution is successful, judges seem loath to impose a punishment consonant with the crime. Prison sentences are given very reluctantly. A defendant who commits a benefit fraud is more likely to go to gaol than a white-collar criminal who bilks millions out of his victims.

Not everything in US justice is good, and Bogira's book, demonstrates that without doubt. But there are approaches that could be taken aboard. We could use more case management and import more judicial control

Thursday, June 08, 2006

Brave New World or How I Learned to Love Tesco Law and Stop Worrying

I've been asked to give a lecture to beginning undergraduates next year on "some aspect of the legal profession". Why not? I haven't taught undergraduates for a long time and it would be interesting to see what they're like.

More importantly, I suspect their ideas of the legal profession don't accord with reality. Most of the books on the English Legal System don't portray reality, instead they depict a sterile image where everything seems to work according to fixed and known rules. In this case, the students need introducing to the 21st century version of the British legal system (if system is an appropriate term here: I think not).

I thought I'd focus on the government's intention to introduce Tesco Law. There are two prongs to this. One is to introduce external regulation. And the second is to free up organisational structures.

Both the Law Society and the Bar Council have been bleating this week at the regulatory moves government is imposing. You would think the legal profession is dying the death of a thousand cuts with the noise they are making. It's hard to have much sympathy for them. When it comes to dealing with clients, lawyers are not very good or adept. So if they make a mess of your affairs, the hurt is compounded when their bodies appear more concerned to protect their members rather than the public. Ergo, goodbye self-regulation.

For me, the organisational side is far more fascinating. Lawyers like to think of themselves as an arcane, esoteric bunch, almost priestly. Outsiders are only admitted on sufferance. That will change if non-lawyer organisations start moving into legal practice. We have a simulacrum of it with inhouse counsel in corporations.

Imagine, then, Tesco offering legal services.

A bedraggled woman with a couple of mewling kids is making her way to the checkout at the Hackney store. The checkout girl looks her over and says,

"Boyfriend been giving you a rough time then?"

"Yeah", says the woman who suddenly shouts at her kid, "Put that bleeding chocolate back, you little thief!"

"Ooh, you're really overwrought and highly strung, aren't you?"

The checkout girl has had client-interviewing training along with learning some legal knowledge. She knows how to empathise too because not only can she do law, she's been through basic psychotherapy and is an avid watcher of "Big Brother". She's the new front line of Tesco Law.

She continues, "If he's giving you a really bad time, why don't you go for one of those restraining orders? That'd stop him. I can get you one right now. You'd feel much better for it."

"Yeah. I'd have some peace at home, then. The kids are playing up something terrible with this."

"And we've got a special offer--it comes with treble Clubcard Points!"

I think the students need to be prepared to welcome the brave new world of law.

Saturday, June 03, 2006

Globalization, "House" and "CSI"

Back in March this year I watched my first episode of "House". And I became enraptured. The diagnostic process, interpreting signs, symbols and symptoms is endlessly fascinating. It is research, of course. Apart from House's (Hugh Laurie) execrable American accent, it is augmented by his wonderful personality--acerbic, occasionally profane, a maverick to delight the senses. House comprises that necessary combination of rigorous science and intuition that enables breakthroughs to appear suddenly.

"CSI" shares some of the same features. The dogged determination to ferret out the truth and wayward characters who are prepared to shun normalcy and officialdom and not be deterred from their paths. Grissom is completely dedicated to his vocation that one could never imagine him doing anything else. Conversely, Horatio Caine in "CSI: Miami", isn't portrayed the same way. Rather, he comes across as a policeman following clues.

There are two aspects to these TV shows I want to emphasize. First, they are very locally based. You would never suspect that there is a world outside their little domains, with the possible exception of Latin America, which seems to be populated with drug smugglers spending their crime proceeds in the fleshpots of Miami. Boston, Las Vegas, and Miami seem to be hermetically sealed environments. There's no intellectual or other engagement with the wider world. Globalization has not percolated through to here yet. And I'm deliberately avoiding taking the ironic view that says the shows themselves have become globalized artefacts: my approach is emic not etic.

Second, the organizations to which the characters belong are remarkably well-endowed and never seem to want for resources. The part of the CSI: Miami office where Horatio meets the victims' families would make an ideal loft space any day. The light, the clean lines--it's a modernist's dream. Nothing like the broken down, ramshackle police stations we see in the UK. They always have the latest equipment that can decode crackly videotapes and run a DNA test in a trice.

House, too, seems to have limitless resources to pursue complex illnesses. It seems like he has the entire Harvard Medical School behind him. In a recent episode he shot a corpse with hollow-point bullets to see if they would react with an MRI scanner. They did and put it out of action for two weeks. Given that the going rate for a scan in this country is £750 and up, that's a lot of moolah foregone. He has a team of experts who are at his continual beck and call. If you are going to fall ill, do it in Boston. (Or, I would also recommend Reykjavik, Iceland, where I came down with appendicitis/peritonitis and had the best treatment.)

Of course, "real life" isn't made up of endless searches for the holy grail with no thought for cost. Once we begin to take a global view of these things, we see a different world. This was manifested in an article in the Financial Times where the American Society of Clinical Oncologists has decided to debate for the first time the costs and benefits of cancer treatments. Cancer therapies have been traditionally sheltered from cost analyses, but treatment is rising in expense and insurers and others want value for money. The chair of the debate, Neal Meresol, said, "Certainly other countries do this routinely." In the UK we have NICE which decides on the expected efficacy and costs of treatments. This is, of course, miles away from the maverick House approach; it is more the dull, routine of evidence-based science that determines how we should spend our tax pounds. Occasionally, the process gets hijacked as it did with the breast cancer treatment, Herceptin, when politics overcomes science. Usually, it is difficult to explain to a sufferer that the treatment can't be prescribed because it's too expensive.

Sometimes, TV life hijacks real life. It seems juries were beginning to refuse to convict in criminal cases unless there was ample DNA evidence, thus usurping normal evidence in favour of "hyper-evidence": the CSI effect. Forensic evidence requests have shot up as a result. However, the more normal approach appears to treat forensic and specialist evidence in a more cavalier way as Professor Sir Roy Meadow, the expert's expert, did in the cot death cases, eg, the Sally Clark case.

The contrasts between TV life and real life can be hard to absorb. If it works in one setting, why can't it work in others? As anodyne and escapist as these TV shows are, they have a potential to raise people's awareness. We don't always have to accept standards that don't accord with our desires.