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This post is part of a regular series published in the New Law Journal of quarterly reviews of the UKSC’s case law and newsworthy events, reproduced here with kind permission.
The Easter judicial term began with a blaze of publicity and no small amount of controversy. In Fraser v Her Majesty’s Advocate (Scotland) [2011] UKSC 24, [2011] All ER (D) 253 (May), the Supreme Court ruled for the first time on a Scottish criminal appeal, overturning Mr Fraser’s conviction for murdering his wife on the grounds that key evidence had not been admitted to the original trial, leading to a violation of his right to a fair trial under Art 6 of the European Convention of Human Rights (the Convention). The decision sparked off a vigorous debate about the constitutional powers of the new court, and whether it was undermining the sovereignty of the Scottish legal system.
Devolution issues
The background to the case is that the UK Supreme Court (as a result of the powers it inherited from the Privy Council by way of the Constitutional Reform Act 2005) has a limited jurisdiction to hear Scottish appeals that raise devolution issues. As well as questions of the devolution of executive power (ie whether the Scottish Parliament has acted within its powers under the Scotland Act 1998), the jurisdiction also extends to the devolved issue of criminal appeals that raise issues of rights under the Convention. In the latter cases, the Supreme Court would act as an interim appellate court sitting between the High Court of Justiciary in Edinburgh, and the European Court of Human Rights (ECtHR) in Strasbourg.
This reverses the principle dating back to the 1707 Act of Union (which stated that the Courts in Westminster “shall have no power to cognosce review or alter the acts or sentences of the judicatures within Scotland or stop the execution of the same”) that the High Court of Justiciary in Edinburgh acts as the ultimate arbiter of Scottish Criminal Appeals, and there are those such as Scotland’s First Minister, Alex Salmond, who have angrily complained of what is perceived to be another unwanted invasion by the south into Scottish matters: “The increasing involvement of the UK Supreme Court in second-guessing Scotland’s highest criminal court of appeal is totally unsatisfactory, and creates additional delay and complexity which cannot serve the interests of justice.”
Cadder
Fraser is not the first time that the Westminster and Edinburgh courts have collided. The case of HM Advocate v Cadder [2010] UKSC 43, [2010] All ER (D) 251 (Oct) saw the Supreme Court determine that Scottish police could no longer question suspects without a lawyer present, and the court’s ruling has caused significant disquiet as police forces have been forced to change their procedures as a result. However, the Cadder principle goes no further than bringing Scots criminal law in line with the rest of Europe, and as Professor Tony Kelly of Strathclyde University has said, writing on www.uskcblog.com: “The Convention compatibility of fresh evidence or non-disclosure appeals with Art 6 is a matter that, if the Supreme Court does not rule upon, the ECtHR undoubtedly will. As the expert group, set up by the advocate general for Scotland to look into such matters pointed out, the internationalisation of Scots law is inevitable: ‘Today, the laws of the Convention and the EU treaties are neither English nor Japanese, nor yet are they Scottish but we are nevertheless bound to obey them’.”
The case is an interesting illustration of the hybrid nature of the court: on the one hand it wears the hat of arbiter of rights under the Europe-wide Convention, a distinctly modern and internationalist role: on the other, it wears the hat (or rather the flax, leek, thistle and rose) as final court of appeal from four distinct countries, a legacy of over a thousand years of constitutional history.
Criminal law
In R (on the application of Adams) v Secretary of State for Justice; MacDermott, Re, [2011] UKSC 18, [2011] 3 All ER 261 the court was split 5-4 on the controversial issue of exactly when compensation should be paid to victims of miscarriages of justice. Section 133 of the Criminal Justice Act 1988 provides that “when a person has been convicted of a criminal offence and when subsequently his conviction has been reversed or he has been pardoned on the ground that a new or newly discovered fact shows beyond reasonable doubt that there has been a miscarriage of justice”. The three claimants in this case had seen their convictions for murder overturned, but had been denied compensation. The question for the court was, when is a wrongful conviction a miscarriage of justice, justifying compensation, and when is it not?
Four categories of miscarriage
The Supreme Court identified four categories of miscarriage, ranging from “category one” (cases where fresh evidence shows that the defendant is innocent) to “category four” (something has gone seriously wrong in the investigation of the offence or the conduct of the trial). But they were split on which categories should justify compensation. The minority (Lords Judge, Brown, Rodger and Walker) favoured limiting compensation to category one cases only. However, the majority felt this interpretation was too narrow, and favoured the following formulation (which in effect embraces category two, cases where fresh evidence is such that, had it been available at the time of the trial, no reasonable jury could have properly convicted the defendant): “A miscarriage of justice should be deemed to have occurred whenever a new fact so undermines the evidence against the defendant that no conviction could possibly be based upon it.”
Readers of this column may have reason to be grateful for the above summary, since the actual judgment stretches to 284 paras over 97 pages. As Edward Craven of Matrix Chambers put it on www.ukscblog.com: “The judgment in Adams may lead some to question the wisdom or convening nine-judge panels of the Supreme Court…in 2009, Lord Phillips expressed his hope that the establishment of the Supreme Court would see more single majority judgments. Adams shows that his ambition is yet to be realised.”
Civil cases
Turning to civil law, there were a number of significant commercial decisions handed down, particularly in the Trinity term. In Jivraj v Hashwani [2011] UKSC 40, [2011] All ER (D) 246 (Jul), the Supreme Court heard its second arbitration case, after Dallah Real Estate v Pakistan [2010] UKSC 46, [2011] 1 All ER 485 reported previously in these pages (see NLJ, 21 January 2011, p 104). The issue in Jivraj was whether a stipulation in an arbitration agreement that arbitrators should be of a specific background— in this case, members of the Ismaili community—was unlawful on the grounds of discrimination. This is turn depends on whether arbitrators can be considered as employees for the purposes of the Employment Equality (Religion or Belief ) Regulations 2003 (SI 2003/1660).
The Court of Appeal had found the answer to both questions as “yes”, causing a certain amount of consternation in the arbitration community. It is a central principle of arbitration that the parties are free to design their own dispute resolution procedure, including by appointment of their own choice of arbitrators. Particularly in international, cross-border arbitrations, it is commonplace for the parties to pick specific arbitrators because of their nationality and background (with a chairman typically being appointed from a “neutral” background). If parties are no longer free to do so under English law, then as Laurence Rabinowitz QC (for the London Court of International Arbitration, intervening) put it, the risk of a “chilling effect” on arbitration in London would be substantial.
The Supreme Court unanimously reversed the Court of Appeal, finding that arbitrators fall outside the scope of worker as laid down by the ECJ and were instead “independent providers or services who are not in a relationship of subordination with the person who received the services”. A victory for common sense, perhaps, and those who instruct arbitrators can feel relieved that they should not be facing claims for PAYE, unfair dismissal or pension contributions in the near future.
In the most high profile intellectual property dispute to reach the Supreme Court to date, the justices were asked in Lucasfilm v Ainsworth [2011] UKSC 39, [2011] All ER (D) 257 (Jul) to consider who owns the rights to the storm trooper helmets from the Star Wars films: Mr Ainsworth, a UK designer, or the director George Lucas’ company, Lucasfilm. Lucasfilm’s claim in essence was that the helmets were “sculptures” within the meaning of the Copyright, Designs and Patents Act 1988, and that its copyright was therefore protected under English law. However, the Supreme Court rejected this judgment, holding that the helmets were a mixture of costume and prop whose primary function was “utilitarian”, in that they expressed an idea as part of character portrayal in the film.
Ainsworth therefore has a defence to the copyright infringement claims, and will be able to continue selling his helmets in the UK, although not in the US. There are tempting parallels to be drawn in terms of fact copying fiction, as a small plucky rebel group takes on the might of an empire. However, it is believed that the justices reached their decision based on application of law and reason rather than by using “The Force”, handy though the latter would undoubtedly be as a tool of dispute resolution.
Finally, in Belmont Park v BNY and LBSF [2011] UKSC 38, [2011] All ER (D) 259 (Jul), one of many global cases arising from the insolvency of Lehman Brothers, the Supreme Court clarified the meaning and application of the common law insolvency principle known as the “anti deprivation rule”. The rule, which is over 200 years old, provides in short that any contract which purports to transfer assets away from creditors on the occurrence of insolvency is unenforceable as a matter of public policy. The courts have seen a number of cases recently (a symptom of “credit crunch litigation”, perhaps) where attempts have been made, particularly by insolvency practitioners, to have unfavourable contracts unwound by the courts in an attempt to restore value to insolvent estates.
The Supreme Court’s judgment has clarified that whilst the rule does still exist, it will only apply to deliberate attempts to avoid the insolvency laws: it will not apply to unwind commercially sensible transactions entered into in good faith. The judgment follows the trend of recent House of Lords/Supreme Court decisions which espouse a commercial and purposive view of contractual construction, in order to given effect to the parties’ intentions as much as possible. As such, it is a welcome boost to the core principle under English law of freedom of contract.
Brief highlights of Easter & Trinity terms:
Adams, McCartney and MacDermott [2011] UKSC 18
Clarifies the circumstances in which compensation should be paid to victims of miscarriages of justice.
GC v Police Commissioner [2011] UKSC 21
Guidelines regulating the retention of fingerprints and DNA samples on the national police database were incompatible with Art 8 of the Convention.
Fraser v Her Majesty’s Advocate (Scotland) [2011] UKSC 24
Murder conviction overturned following breach of Art 6 of the Convention; case remitted to Scottish courts for fresh trial.
NML Capital v Argentina [2011] UKSC 31
Principle of state immunity did not apply to a commercial transaction entered into by the state of Argentina.
Al Rawi v The Security Service [2011] UKSC 34
Security Service denied the right to follow a “closed material procedure” in civil proceedings brought by Guantanamo Bay detainees.
Belmont Park Investments v BNY Corporate Trustee and Lehman Brothers Special Financing [2011] UKSC 38
Anti-deprivation rule did not apply to invalidate “flip” provisions in structured finance program.
Lucasfilm v Ainsworth [2011] UKSC 39
Clarification of property rights under Copyright, Designs and Patents Act 1988; English law found to have jurisdiction over US party.
Jivraj v Hashwani [2011] UKSC 40
Arbitrators are not employees for the purposes of discrimination laws.