Category: International Agreements

The story of Jack and Harry – what the respective Grealish and Kane contract situations tell us about all legal agreements, including the Brexit deal

6th August 2021

On the face of it, this blogpost may be about football – but the point it is seeking to advance is about all legal agreements, including the Brexit deal.

So if you are not a football fan, bear with the context, for the post is really about a more important general principle.

By way of background, there have been two football transfer stories in England in the last week.

One is the completed record £100 million transfer of Jack Grealish from Aston Villa (the club I happen to support) to a Manchester club.

The other is the potential and, as yet, frustrated transfer of England captain Harry Kane from a London club to that same Manchester club.

(I hope the supporters of those other clubs do not mind my gentle teasing – Aston Villa fans have not had a great few years, and we have to take pleasures as we can.)

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The story of Jack

The reason why the transfer of Jack took place is that he (with his agent and his lawyers) negotiated a particular provision in his contract with Aston Villa.

This provision appears to have been a clause with the following form:

In the event that

(a) there is a transfer bid of £100 million is received from

(b) a club taking part in the European champions league and

(c) Aston Villa is not taking part in the European champions league,

then a release option can be triggered by the player.

This provision appears to have been inserted in the new contract that the player negotiated and signed with the club last year.

It seems that Aston Villa did not want to sell Jack at less than £100 million nor in circumstances that would adversely affect the club’s chances in the European champions league in the happy (and then unlikely) event the club qualified for the competition.

The £100 million amount selected was a record fee for a transfer between domestic clubs and would have (then) been regarded as prohibitively high, but it also was a sincere and fair estimate of the value to the club of the club’s captain, who they perceived to a be a world-class footballer.

On the other hand, Jack did not want any old transfer from Aston Villa, but he wanted to have the real option of joining a club where he could play alongside and against players of a similar standard to himself in European champions league football.

Both parties agreed that this would not and should not happen if Aston Villa itself was playing in the European champions league.

So both parties agreed that in the foreseeable circumstances of interest from a club taking part in the European champions league, what the allocation of risk would then be, and they agreed a practical provision accordingly.

And when interest came from such a club, the parties then know what their interests and positions would be.

Wise Jack.

Wise Aston Villa.

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The story of Harry

Harry also wants to join the same Manchester club.

But it appears Harry and his advisers did not negotiate such a provision in his contract with his London club, who are not taking part in the European champions league.

This was even though it was foreseeable that clubs taking part in the European champions league would want to purchase the England captain and leading goal scorer.

And because there is no such provision to trigger, Harry is reduced to refusing to turn up for training.

It appears he is seeking to use extra-contractual means to end his contract with present club, so as to force through a desired transfer.

This tactic may or may not work, but it is certainly unseemly.

A better approach would have been for him (and his advisers) and the London club to have sat down and discussed the possibility of such a transfer.

The London club, like Aston Villa, could have stipulated onerous conditions to protect their legitimate interests which would have to be met, and Harry could have accepted these conditions in return for the right to trigger the option of a release if those conditions were met.

Of course, it take takes two parties to agree a contract – and it may be that one (or both) of the parties could have refused such a provision outright.

But such a lack of realism has only resulted in the current messy situation, and stubbornness would have achieved little.

It would have been better for both parties if such a realistic option had been provided for.

Instead Harry is at home upset and frustrated.

He appears to have believed there was a ‘gentleman’s agreement’ that would bind the London club, rather than the club being bound by the actual wording of the contract.

Unfortunate Harry.

Unfortunate London club.

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The story of Brexit

With Brexit, the United Kingdom appears to have adopted the Harry Kane approach to contracts – of signing some agreement and then hoping the agreement does not mean what it says.

And so the United Kingdom government is, in effect, also sulking in its plush London home, hoping to force the European Union to move from what was actually agreed.

A more sensible United Kingdom government would – at the time the agreement was negotiated – have dealt with foreseeable risks by allocating the risks as between the parties.

The United Kingdom should have been more like Jack.

But instead it has been like Harry.

Unfortunate United Kingdom government.

Unfortunate us.

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Exclusion from the Lugano convention – is this the legal cost of political toxicity?

28th July 2021

I am currently putting together a piece on the United Kingdom’s exclusion from the Lugano Convention, following Brexit.

The convention provides for the enforcement of judgments in European Union and (all but one) EFTA states – in essence, a judgment of a court in the United Kingdom can be enforced in Italy or Denmark and so on.

Without the convention, enforcement of a domestic judgment is less easy – and far more expensive and time-consuming.

The United Kingdom is seeking to re-join the convention from outside the European Union – but the European Union is effectively vetoing the application.

See this CNN thread here:

One thread in this sequence struck me – and my upcoming piece will be an assessment as to whether such a serious charge is valid:

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If there is validity in this charge then this is indeed a concrete – and consequential – example of the ‘moral hazard’ of which this blog has previously warned.

Such infantile politics must have seemed very clever at the time – with claps and cheers from political and media supporters – but now the effects could be manifesting.

What is less clear is whether this is a serious legal problem as well as a political failure – will it make much difference in legal practice?

Or is its legal significance overblown – event if it is a political embarrassment?

I will post a link to my piece in a day or two when it is published.

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Why the government did not ‘override’ an Act of Parliament over overseas aid – the concerning thing is that the government acted in accordance with the law

14th July 2021

Yesterday there was this stunning tweet from Lord Falconer, the experienced QC and a former lord chancellor – and now a Labour spokesperson.

There are many things to be said about the government’s decision on this – for example there is what former prime minister John Major said:

There is nothing positive to say about this illiberal and misconceived decision, and it should be opposed by every sensible person.

But what Falconer said appears incorrect – either in the head tweet or taking the thread as a whole.

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The correct position, as has been previously set out on this blog, is that the obligation under the International Development (Official Development Assistance Target) Act 2015 is not an absolute obligation.

The act provides for a statutory target of 0.7% of gross national income is sent on overseas aid – but this has no legal force and is certainly not absolute.

Section 1(1) provides:

“It is the duty of the Secretary of State to ensure that the target for official development assistance (referred to in this Act as “ODA”) to amount to 0.7% of gross national income (in this Act referred to as “the 0.7% target”) is met by the United Kingdom in the year 2015 and each subsequent calendar year.”

Section 1(1) is subject to wide wide exceptions in section 2(3):

“(a) economic circumstances and, in particular, any substantial change in gross national income;

(b) fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing;

(c) circumstances arising outside the United Kingdom.”

In view of these exceptions, the section 1 cannot be called ‘absolute’.

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To take advantage of an exception, the government has to lay a statement before parliament.

This is set out in section 2 of the act, which – of course – as much a part of the legislation as section 1.

And that is what the government did yesterday – the statement is here, and it states:

‘The government will continue to act compatibly with the International Development (Official Development Assistance Target) Act 2015, under which accountability is to Parliament. The Secretary of State will lay a statement in Parliament in accordance with section 2 of the Act in relation to each calendar year in which the government does not spend 0.7% GNI on ODA.’

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The legal problem with the international aid cut is not directly with what the government did – for they have complied with the act.

The problem is with the sloppy drafting of the legislation, which makes the target obligation nothing more than a nice-to-have.

The public understanding of law is a valuable but fragile thing and such misleading comments undermine the public understanding of law.

The correct response to sloppy legislation is not sloppy commentary.

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As a post script, even the section 2 exceptions do not really matter as section 3 explicitly robs the entire duty of any legal usefulness whatsoever:

“(1) The only means of securing accountability in relation to the duty in section 1 is that established by the provision in section 2 for the laying of a statement before Parliament.

(2) Accordingly, the fact that the duty in section 1 has not been, or will or may not be, complied with does not affect the lawfulness of anything done, or omitted to be done, by any person.”

What a useless piece of legislation.

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Are there again things stronger than parliamentary majorities? Bogdanor and the question of Unionist civil disobedience or even rebellion

In today’s Sunday Telegraph there is a short, 750-word opinion piece by Vernon Bogdanor, the eminent professor of government.

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Previously I have criticised Bogdanor for not appreciating the constitutional significance of the Good Friday Agreement – see here and here – to which he responded here.

My view is that he has a vision of the constitution that holds that the position before the Good Friday Agreement is the norm from which politics and law have since deviated.

If you look at that exchange, you can form your own opinion on the merit or otherwise of my view.

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Bogdanor’s latest opinion piece is about the Northern Irish high court decision last week in respect of the challenge by unionists of the Northern Irish protocol – a case which this blog touched upon here.

The judgment is some 68-pages but is readable and is worth reading.

Bogdanor spends the first part of his article setting out a general account of the submissions made by the applicants and he then briefly summarises the court’s decision.

His summaries are not the ones that I would write – but they are unexceptional even if not balanced.

And then.

The article takes a turn.

We get to the final three paragraphs, and something happens.

Let’s take these paragraphs in order – and sentence-by-sentence.

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‘The uncodified British constitution allows Parliament to decide that Northern Ireland should be subject to different goods regulations and trading rules from the rest of the UK.’

The second part of that sentence is generally correct – though it is hardly the fault of our uncodified constitution.

Such a decision could easily have taken place under a codified constitution.

It was, of course, a decision for which the government had a mandate in the December 2019 general election as part of the ‘oven-ready deal’.

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‘But Unionists hold a different view of the constitution.

‘They hold that loyalty to Westminster is not unconditional, but dependent upon respect for the Union.’

This is a rather significant thing to say – and it contends that the legitimacy of the United Kingdom state is ultimately contractual – even transactional – as that loyalty is dependent on ‘respect’.

The implication of this would appear to be that if the United Kingdom state is in breach of this contract then the unionists no longer should abide by the law of parliament.

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‘That is why in 1974, a power workers strike by Unionists brought down the Sunningdale Agreement, which had provided for a cross-border Council for Ireland giving the Republic what Unionists believed was excessive influence over Northern Ireland.

This refers to this exercise in civil disobedience.

Is Bogdanor suggesting there could, as a matter of fact, be similar civil disobedience now?

Or is Bogdanor even averring that such civil disobedience would be justified under our uncodified constitution?

It is not easy to tell.

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‘The Unionists are Queen’s rebels.’

I am not sure what Bogdanor means by this.

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‘Where then stands the Protocol?

‘The EU Commission has agreed to the Government’s request to extend the grace period for chilled meat for three months.

‘But that merely kicks the can down the road.

‘In any case, the argument is not about sausages but about whether Northern Ireland is to be cut off from the rest of the UK.’

Here we perhaps go from the salami to the ridiculous.

The dispute is, of course, more than about sausages – but to escalate it to it being about the very union does not necessarily follow.

There are a range of resolutions to this dispute – either through the mechanisms of protocol or by amending it – all of which are consistent with the continued existence of the union.

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‘The court in Belfast is, however, right to this extent.

‘The question of whether the Protocol is constitutional is one not for the courts but for politicians.’

Here the contentions of the opinion piece appear to become confused.

A couple of sentences ago, Bogdaonor was saying that there could (and even perhaps should) be civil disobedience.

Civil disobedience means direct action outwith the processes of political institutions – that is out of the hands of politicians and the formal political process.

Unless, of course, what he means by ‘politicians’ are the leaders of the envisaged civil disobedience.

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‘The case for the Unionists is based on the Enlightenment principle of consent of the governed.’

Is this proposition correct?

The basis of unionism is the positive belief in membership of the United Kingdom, a belief that would still have force even if (or when) it becomes a minority view in Northern Ireland.

If (or when) that does come to pass, would a united Ireland (as endorsed in a border poll) be an imposition on the unionists?

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‘Sadly, the Unionists of Northern Ireland, together with Kurds and Israelis, are deemed not to be entitled to the benefits of this principle by progressive theologians.’

No, I am not sure what this means either.

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‘But it is, nevertheless, a principle which should be enthusiastically championed by the Conservative and Unionist party of the United Kingdom.’

This is the last sentence of the article, and its import is unclear.

The Conservative Party is currently the governing party of the United Kingdom and it stood on an explicit manifesto commitment to get Brexit done by means of the withdrawal agreement – which contained the Northern Irish protocol.

For them to now switch would mean negating a manifesto commitment on which they won an emphatic victory in a general election dominated by the issue of Brexit – a general election that treated the whole of the United Kingdom as a single political unit.

This treatment of the United Kingdom as a single political unit was also, of course, adopted at the time of the 2016 referendum, where a majority the voters of Northern Ireland (like Scotland) voted to stay in the European Union.

Presumably the decision of the parliament of the United Kingdom to take Northern Ireland out of the European Union against the wishes of the people of Northern Ireland was also a breach of some enlightenment principle or other.

And when the Conservative Party do not ‘enthusiastically champion’ what Bogdanor wants them to champion, what then?

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Another constitutional principle – also in part from the Enlightenment, as it happens – is that of the rule of law.

The ‘rule of law’ is not mentioned in Bogdanor’s 750-word piece, which still found room for mention of both the ‘Queen’s rebels’ and ‘progressive theologians’, and is a shorter phrase than either.

The contention that unionist loyalty is ultimately conditional despite the law of parliament is reminiscent of “there are things stronger than parliamentary majorities” – a phrase with an unfortunate history in the context of Ireland.

A general strike – such as in 1974 – was not the only way that unionists in Northern Ireland have taken it upon themselves to prevent a perceived breach of the perceived contract between the government and the governed.

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To the extent that Bogdanor is warning in a positive way that peace and stability in Northern Ireland requires sincere and proper regard to the unionists then no sensible person can gainsay him.

But to the extent (if any) that Bogdanor is contending that the uncodified constitution and the principle of the consent of the governed justify a resort to resistance and rebellion (queenly or otherwise, and unarmed or otherwise) and discard for the rule of law then I fear he has fallen into error.

Bogdanor is right to say that political questions should be dealt with politically and not by the courts, but such questions also should be dealt with in accordance with the law.

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What is Force Majeure? And why is it now being mentioned in the context of Brexit?

18th May 2021

A historian of ideas – probably Isaiah Berlin – once averred that most philosophical systems were ultimately simple affairs.

What made them complicated, it was said, were the elaborate defences and anticipations of objections so as to make the arguments advanced harder to attack or dismiss.

I have no idea if this is true, as I have no head for philosophy, but I have often thought the same can be said for contracts.

Most agreements are also relatively simple – and most of us, every day, enter into oral contracts which are nothing more than ‘I give you [x] in return for [y]’.

Written out, such contracts would not need to be longer than one sentence – a single clause.

What makes a legal agreement complicated – and what can make a written contract go on for hundreds of pages of clauses and schedules – are the provisions dealing with what will happen if one party does not do [x] or the other party does not do [y].

This is because most written contracts are not there for when things go well: they are there for when things go badly.

The more provisions that are in a contract, the more allocations of risk and protections for the parties if there are problems.

For high-value or significant agreements, teams of lawyers will painstakingly (and often expensively) go through every possible and foreseeable eventuality, and will then allocate risk accordingly as between the parties.

There will also be detailed provisions setting out the processes for resolving and remedying problems.

In most circumstances, those provisions will not ever be used.

(As a general though not universal rule, the more effort that goes into putting a contract together, the less scope for genuine disputes later.)

But sometimes a thing can happen to disrupt an agreement that has not been addressed in the agreement.

This disruptive event can have three qualities: (1) it will be outside the control of the parties (else all you would have is a potential breach); (2) it will be outside of the allocations of risk in the agreement (else the agreement already deals with what will then happen); and (3) it will affect the performance of obligations under the agreement (else it would not matter).

In legal language, such a disruptive event is said to ‘frustrate’ the agreement.

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In English contract law, such frustrations often lead to unfair and uncertain results – and every law student will know of the so-called ‘coronation cases’.

Lawyers elsewhere, however, approached this sort of predicament differently and developed the doctrine of ‘force majeure’.

A force majeure event is a thing that (1) is outside the control of the parties; (2) is outside of the allocations of risk in the agreement; and (3) affects the performance of obligations under the agreement.

If the doctrine applies there is then some certainty of what will then happen in the event of a force majeure event – sometimes the consequences can be agreed between the parties, or the consequences may be provided for under the general law.

Force majeure, however, is a residual thing – if the parties have foreseen the particular risk and allocated that risk then the terms of the agreement should take priority.

This means (generally) the more detailed the agreement, the more limited the scope for force majeure.

The analysis set out by me above is from the perspective of an English commercial lawyer but the doctrine also exists in what is called ‘public international law’ – that is the law that regulates relations between countries (and also international organisations):

You will see the public international law document quoted provides that a thing cannot be a force majeure event if (a) it is because of the conduct of the state seeking to rely on it and (b) the risk of it happening has not been allocated.

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What all this means is that it is often difficult in practice to rely on force majeure when there is in place a detailed and specially negotiated agreement.

This is because the parties will have foreseen and addressed most practical problems.

And even if there is a force majeure event, that also does not mean it is a ‘get out of an agreement free’ card – as all that may result is a temporary relief from fulfilling an obligation until the force majeure event is over.

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The reason why force majeure is in the news is because David Frost, the United Kingdom minister responsible for Brexit negotiations, appears to think that force majeure can be relied on to relieve the United Kingdom from its obligations under the Brexit withdrawal agreement and its Northern Ireland protocol.

The news report says:

‘Force majeure is a legal concept through which a party can demand to be relieved of its contractual obligations because of circumstances beyond its control or which were unforeseen.

‘The suggestion is contained in a 20-page letter the UK has sent to the European Commission.’

To which the response should be: good luck with that.

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In practice, any reliance on the doctrine of force majeure by the United Kingdom will come down to two particulars: (1) what is the (supposed) particular force majeure event, and (2) what is the particular obligation that is (supposedly) affected by that event.

Until this is known, one cannot be completely dismissive.

But.

It is difficult to believe that there is any event that (1) affects the performance of a particular obligation under the Northern Ireland Protocol which (2) is not within the control of one of the parties and (3) is not addressed in the protocol.

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And in response to the thread on Twitter on which this blogpost was based, this scepticism was endorsed by Jonathan Jones, who was the United Kingdom’s chief legal official during the Brexit negotiations:

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That the United Kingdom government had not thought through or cared about the detail of the withdrawal agreement was not unforeseeable.

It was, to use another technical legal term, bleedingly obvious.

It is difficult to conceive of anything that could be a force majeure event that is not already subject to the provisions and processes of the Northern Ireland Protocol.

On the face of it, therefore, the resorting to ‘force majeure’ by the United Kingdom looks desperate – a makeweight argument deployed for want of anything more compelling.

There is, however, the delicious legal irony in the circumstances of the United Kingdom seeking to rely on a French legal doctrine used to cure the inadequacies of English law-making.

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‘An uncomfortable chair’ – why the international trade secretary wrongly believes trade deals are quick and easy, and why this false belief matters

22nd April 2021

One of the consequences of politicians not having careers before entering parliament is that ministers can be over-influenced by unusual experiences.

For example, as home secretary Theresa May and her advisors had the benefit of the ‘pick-and-choose’ approach to European Union justice and home affairs matters, where the United Kingdom had a number of opt-outs.

And so when May and those advisors were translated to 10 Downing Street it appeared that they believed that the same à la carte approach could be taken to the single market in the Brexit negotiations, unaware that the European Union would instead have a more of an ‘all-or-nothing’ approach.

Similarly the current international trade secretary Elizabeth Truss has been misled by her experiences to date into thinking international free trade deals are easy.

This is because in the immediate post-Brexit period it was possible to ‘rollover’ a number of existing trade deals between the European Union and (so-called) third countries, almost on a ‘copy-and-paste’ basis.

 

Such a formative experience would also be informed by the basic error of post-2016 governments of the United Kingdom that Brexit itself was a quick and easy task.

But.

There is a significant difference between continuing with an existing trade arrangement and putting in place an entirely new free trade agreement from scratch, especially with another major economy.

The slowness, however, is a surprise and a disappointment to the current international trade secretary, who is a politician in a hurry.

And so we get this preposterous news story.

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‘…an uncomfortable chair’

The only normal reaction to the detail of this excruciating news story is to cringe with sheer embarrassment. 

(By the way, the use of ‘allies’ as a plural means that the pronouns for the ‘source’ are the less-revealing they/them – which are presumably the international trade secretary’s preferred pronouns.)

Of course, this daft intervention has not gone unnoticed by Australia.

Perhaps the ‘allies’ of the international trade secretary did not believe that these comments would ever reach the Australians.

Silly them.

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The serious point here is, well, about the lack of seriousness.

The United Kingdom needs to be taken seriously as a party to international agreements in this new, lonely post-Brexit period.

Yet the United Kingdom seems no closer to getting why this important.

We have a prime minister who is loudly and publicly denouncing as ‘ludicrous’ the very arrangements in respect of Northern Ireland that resulted from his own change of policy, which he negotiated and signed, and for which he campaigned for and won an electoral mandate before rushing into law.

There seems to be an unawareness that the world is watching these antics.

And although they may ‘play well’ to domestic political and media constituencies, that is at a cost to the United Kingdom’s interests as an actor on the international stage.

The prime minister and he international trade secretary need a period of reflection about these counterproductive utterances and gestures.

Perhaps they should sit down, and think hard about what they are doing for a few hours.

Perhaps, even, in an uncomfortable chair.

*****

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