LEGAL ISSUES of FINANCIAL SCANDALS and their MONETARY CAUSES
A Series of Discussion at the House of Lords

NOTES OF LAST MEETING     House of Lords on Wednesday December 15th

Apologies - 9 apologies received
Present : Sabine McNeill [Co-ordinator]; Donald Martin [Chairman]; Ian
Lawson-Cruttenden [Speaker]; Lord Ahmed our host; Lord Sudeley; Canon Peter Challen [Minute Secretary]; Lawrence Bloom [Adviser]; Abdullah Homouda [Adviser], Keith Whincup [SAFE];  Julita Karol; Shard Duhart;  Nathaniel Rohde plus two others of Tim Lawson-Cruttenden Law team, Jonas Abel: Tony Pritchard; Colin Whitmill and  Lowell and Vera Manning [NZ - Basic Income]; Moeen Yaseem; Lufti Talib; Leigh Carr; Edward Starling; Iqbal Bawany; Neil Bhatier; Anthony Chevasse; Shaheen; Mary Fee; Peter Travers; Ken and another; Abdul Razak Dambhar [Adviser] plus two guests (34)

The Chairman drew out the range of interests in the assembly, and Sabine welcomed our speaker.

Tim Lawson-Cruttenden addressed the forum on 'Legal Aspects of
Bankruptcy'. Tim acts for Bank victims, is an harassment lawyer and an historian.  He made three introductory points:

1. In the courts little can be done under the existing legal framework and the Banking Act to defend wronged borrowers against the banks.

2. The banks act, in his experience, a) in an attitude of spite *, and b) to get the money which is technically, but not always morally, theirs.

3. Tax relief on savings is a system based on the false myth that we have free banking. He said that there was foundation wisdom in the Leviticus and Deuteronomic scriptures that we should examine against the contemporary situation - he'd return to that. [I am putting an * against points he indicated should be examined in detail and could be changed by sensitive legislation]

An Act of Bankruptcy and liability for legal fees of the lender comes into effect on 'failure to pay a lawful creditor immediately (within 28 days) on demand'. In 98% of cases Trusteeship in bankruptcy are imposed because of failure to meet Invoices or bank instruments (Legal, Guarantees, Over/draughts or Mortgages ) which on demand must be paid within 21 days.

* TERM LAWS ARE REQUIRED

There is so much insolvency because of two public policy matters :-
1. We are not encouraged to save cash. Instead, mortgages, life policies, pension contributions - all with tax relief), so we become susceptible to banks, being a non-liquid society.
2. A controversial political point that New Labour decided interest rates will be the fiscal policy to control inflation- and paradoxically created thereby greater profits for banks and insurance companies.

Human Rights Act. Protocol 1, Art. 1 states 'a right to enjoy your
possessions' that right is fettered by the banks. * at least there should
be a HEALTH WARNING. (exposing outcomes) - selling your assets at the quickest rate by a forced sale is very difficult to challenge in Common Law.

* Statutory Limitations on how assets are sold should be examined (own home can be sold -  other family members have to buy your interest - almost impossible in the given time). Also very difficult to borrow from another bank in this situation.

* Family Homes.  146 Administration of Justice Act - provides some measure of protection if you hold a mortgage. No protection otherwise (this could be a breach of Human Rights).

* Lawyers and accountants acting as Insolvency Practitioners charge £250 per hour with no limitation on fees - a court has no control over banks and trustees in bankruptcy - costs can go up to 50 % of the assets. *

* Statute of Limitations should be applied on charges and made subject to Court's jurisdiction.

* Trustees in bankruptcy own your assets 'for ever' - not cleared after
three years.

* Bankrupt can't be a director or a professional - * can't rent under
commercial lease that is forfeit. If for instance VAT has been overlooked for 21 days, the bailiffs can come and that is against you for ever.

There is an ancient philosophical and religious tradition, expressed
strongly in Leviticus and Deuteronomy, proposing a Jubilee restructuring and forgiving a write-off after seven years [Peter Challen has an interesting article by George Goyder on Usury - available on e-mail or fax by request]

Magna Carta was not about civil liberties but about a power struggle
seeking to enable 200 families to redress the balance of power after the King's power had become too great. Today banks and insurance companies are more powerful than Governments - possessing the great privilege of creating and lending at interest.

We must seek legal ways to redress the balance - to end the power of
feudal banks. It  is now threatening democracy - due to their lack of
accountability.

We must prepare a proper record write-off provision to represent a
contemporary principle of Jubilee.

Discussions followed which oscillated between the emotive and the
specific facts of serious and permanent social harm in the present system.

Points raised :-
1. Limits on interest charged by creditors often amount to fraud. Interest charges by creditors payable by the conditions of the instrument. It is compounded if there is no contract. If no provision is made the Court rate is 8% single interest. * Contracts between banks and their customers are vital.

2.* Enlargement of creditor's claims is fraudulent and should be made an offence, but courts don't like to get involved in civil cases.

3. * Unfair Contracts Act should be looked at - but no possibility yet that
can be brought against the banks.

4. * Undue Influence provisions should be examined. They can be applied, for example, to a wife signing away - but very limited.

5. * In New Zealand a Credit Contract Act  requires disclosure by banks to go through every detail with the lender - but it still has no requirement to state the consequences.

 6. * The Freedom of Information Act - the Financial Services Authority FSA must record advice given but banks have no such duty so you can't enforce discovery.

7. * Personal files may be affected by the right to fair trial legislation.

8. * Prudent lender of guarantee should have a right to discovery.

9. * Banking Ombudsman is not effective - having only responsibility for
mal-administration.

10. There needs to be a requirement for a specimen
contract from the consumer's point of view and a duty of disclosure
and discovery in the contract (as in NHS).

We were reminded that the scriptures, of the Jewish, Islamic and Christian traditions, have 450 references to prayer, 450 references to faith and 2460 references to the wise use of money. It is difficult to discern the behavioural outcome of this in synagogues or churches. Islam alone tries to maintain this ancient wisdom about social justice regarding usury.

11. * Bank barons. Most bank actions deny discovery. This should be
examined  under Data Protection. * It is thought that there is an EU
Directive on manual records .

12. * Exemplary damages should be available in all cases of overcharging by innocence, accident or deliberately.

13. * Some kind of Conspiracy Law - (conspiracy is 'to do an unlawful act intending to do some one harm').

14. * We should examine the possibility of a Consumer's Contract. Judges are usually fair but fettered by the obscure powers of banks.

15. * Banks cannot have a duty to lend you money. But as a GP can't strike to take you off his list unless you are a 'vexatious patient' so there should be assurance of a proper agreement.

16.* Most loans subject to predatorial action.

17.* Protected under the Administration of Justice Act only if holding
property on mortgage. Such power is impervious to criticism and endangers democracy.

18. * Resistance to seductive advertising by the banks should have
contractual force.

19. * Banking Law is written in the banks' favour. They are not above the law but the banking Act doesn't prevent socially immoral behaviour.

20. * Endowment and pensions mis-selling, which is in fact deception or fraud, must be legislated against. Barclays spends £260 million year on legal fights - how can anyone expect to achieve justice against such financial dominance.

21. * Unsecured loans should BE unsecured, not subject to Bankruptcy. Although it is recognised that much bankruptcy arises from the fault of the borrowers it is none the less important to recognise the irresponsible and predatory actions of the banks. In many bankruptcies there are economic reasons outside the control of the debtor and that should be part of a contract or a code of conduct in relation to cash flow problems. Such a code should have contractual strength.

22. * We need an education process based in Law in the House of Lords.

23. * In cases of monopoly - for example Motor Insurance there is a Motor Insurance Bureau to cover compensation. For a monopoly over lending there should be a quid pro quo - with write-off policy for protection. This should relate to the seven years principle of Jubilee - even though this may set up a second-hand debt market.

24. * In problems relating to assets elsewhere under different
jurisdictions, in most cases the assets belong to the Trustee in bankruptcy unless written off in the contract. Exclusion clauses should go into the contract. One should be able to have exempted assets. Limited Liability and banking contracts need such legislation.