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
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
* Trustees in bankruptcy own your assets 'for ever' - not cleared after
* 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
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
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
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
18. * Resistance to seductive advertising by the banks should have
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
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
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
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.
25. * The banking system is not FREE as we think. Tote laws govern %
interest and % admin Costs on betting, but no protection re banks. This should
be changed. In NZ financial services are exempt from VAT.
There followed the general business of the Forum.
Having received funding, Sabine produced a fine new leaflet, aided by
Elizabeth Harper and, with substantial support from Mary Fee, distributed
it to 650 MPs before the meeting.
It will go to 670 members of the Lords in the new year. Austin Mitchell MP,
endorsed it with a strong covering letter for the House of Commons. Lord
Caithness wrote and Lord Ahemd sent a cover letter for the House of Lords. A
draft press release has also been prepared for use in the New Year.
The Steering Committee and a 'Monetary Brainstrust' are still under
consideration with people of substantial international standing to endorse our
The submission to the House of Commons select committee has not been made.
A web-site has been prepared by David Edmond. It will be made available when it
is clear where it can be hosted. It also includes a facility for discussions.
Sabine has written to all 25 Members of Standing Committee A at the House of
Commons where the Financial Services and Markets Bill is being discussed. There
should be an amendment that ensures that the supervision of day-to-day
business of banks becomes part of the remit of the FSA.
Positive news was given of new engagements, of the continuing London gatherings
(see previous notes).
There is an increase in the number of people beginning to look seriously long
for a forbidden word usury.
Lowell Manning, a visitor from New Zealand spoke activities there on Basic
Income, Active moves on complementary currencies, and change to a Government
more susceptible to the case for monetary reforms.
There were other reports from the Congress on Democracy, and the powerful and
well financed movement to challenge the desire to join the Euro.
The date of next two meetings are Tuesday January 18th and Wednesday 9th
February (note this correction).