Online | Intermediaries in Commercial Law Conference
10 June 2021–11 June 2021, 9:00 am–2:00 pm
The Bentham House Conference 2021
UCL Laws Events
About the conference
The Bentham House Conference 2021 will be on “Intermediaries in Commercial Law” and held at UCL on 10-11 June 2021.
Intermediaries play an important role in many aspects of commercial law. Yet there has been little focussed attention upon intermediaries as a crucial category of actors. The aim of this conference is to consider current issues concerning intermediaries from a number of different angles, adopting a range of methodological approaches. The conference will consider the rights and liabilities of intermediaries, and how intermediaries can affect the legal position of others.
This conference, organised by Professor Paul Davies (UCL), is intended to be the first in a biennial series of conferences on different aspects of commercial law, organised in collaboration with City University of Hong Kong, Notre Dame Law School and the National University of Singapore.
This conference will be delivered online on Zoom.
Please note that a paperbank with draft versions of the papers will be made available to delegates in advance. The speakers will give a short presentation, which will be followed by discussion with panel and audience members. We encourage delegates to participate fully in the conference discussions - either through the chat or by raising a hand to make comments.
- Programme (subject to change)
Thursday 10th June 2021
09:00 - Session 1
- William Day (3 Verulam Buildings):
- The Unhappy Centenary of Said v Butt
- Rachel Leow (National University of Singapore):
- Gerard McMeel QC (University of Reading / Quadrant Chambers):
Agency Theory Revisited and Practical Implications
- Sarah Worthington QC (University of Cambridge):
The special problems of intermediaries exercising powers by majority vote
10:30 Comfort Break
10:45 Optional break-out room for further discussion on the previous session
11:15 Comfort Break
11:30 Session 2
- Sarah Paterson (LSE):
Insolvency Practitioners and the Leveraging of Intermediary Power
- Alexander Loke (City University Hong Kong):
Intermediaries as “gatekeepers” in international and domestic regulation
- Magda Raczynska (UCL)
The proprietary nature of interests in intermediary-held assets
- Hans Tjio (National University of Singapore):
Adjudicating Intermediary-Related Losses
13:00 Comfort Break
13:15 Optional break-out room for further discussion on the previous session
14:00 Session 3
- Deborah DeMott (Duke University):
The Platform As Agent
- Christian Twigg-Flesner (Warwick Law School):
Regulating Online Intermediary Platforms: Contracts, Networks, or Something Else?
- Roger Alford (University of Notre Dame) :
Google's Use of Intermediaries to Monopolize Online Display Advertising
- Ying Hu (National University of Singapore):
Platform Liability for Terrorist Activities
15:30 Comfort break
15:45 Optional break-out room for further discussion on the previous session
16:15 Day one ends
Friday 11th June 2021
09:00 Session 4
- Matthew Conaglen (Sydney Law School):
The Fiduciary Status of Agents
- Louise Gullifer QC (University of Cambridge) & Hin Liu (FUSANG / University of Oxford):
Client-intermediary relations in the crypto-asset world
- Jodi Gardner (University of Cambridge) & Chee Ho Tham (SMU):
Debt Collection and Assignment of Debts: Navigating the Legal Maze
- Andrew Godwin (Melbourne Law School), Wai Yee Wan (City University Hong Kong), & Yao Qinzhe (Skandan Law LLC):
Operationalising the Duty of Care on Financial Adviser as Intermediaries to Individuals and Households
10:30 Comfort Break
10:45 Optional break-out room for further discussion on the previous session
11:15 Comfort Break
11:30 Session 5
- Matthew Harrington (Université de Montréal):
Risk, Wrong, and Unjust Enrichment from Third Party Transferees
- Ben McFarlane & Andreas Televantos (University of Oxford):
As Complex as ABC? Protecting Third Parties from Unauthorised Acts of Intermediaries
- Laura Macgregor (University of Edinurgh):
Partners within UK Partnerships – Unusual Commercial Intermediaries?
13:00 Lunch Break
13:30 Optional break-out room for further discussion on the previous session
13:45 Conference ends
Roger Alford - Google's Use of Intermediaries to Monopolize Online Display Advertising
In December 16, 2020, ten State Attorneys General filed a lawsuit in the Eastern District of Texas alleging that Google, through its intermediaries, has engaged in monopoly practices in violation of United States antitrust laws. The purpose of this paper is to discuss the role of intermediaries in the ad tech market, and how Google has abused its intermediaries to harm consumers.
Google is an advertising company that makes billions of dollars a year by deceptively using individuals’ personal information to engage in targeted digital advertising. Google has extended its reach from search advertising to dominate the online advertising landscape for image-based ads on the web, called “display ads.” In its complexity, the market for display ads resembles the most complicated financial markets; publishers and advertisers trade display inventory through brokers and on electronic exchanges and networks at lightning speed. As of 2021, Google is a company standing at the apex of power in media and advertising, generating over $161 billion annually with staggering profit margins, almost all from advertising.
Online publishers and advertisers depend on several different, distinct, and non-interchangeable intermediaries to sell their web display inventory. These intermediaries include: (1) the ad server, which acts as the publisher’s inventory management system and helps the publisher sell its inventory, (2) the marketplaces that match buyers and sellers of display ads (exchanges and networks, separately), and (3) the ad buying intermediaries that advertisers must use as their middleman to buy display inventory from exchanges. These intermediaries conduct the complex tasks associated with pricing, clearing, executing, and settling billions of display impressions every month in the United States. Google possesses monopoly power in each of these distinct markets and uses its intermediaries to control the ad tech market. The lawsuit against Google will attempt to challenge Google’s use of intermediaries and argue for structural and behavior changes that prevent Google from continuing its monopoly practices.
Matthew Conaglen - The Fiduciary Status of Agents
This paper is concerned with the question whether agents owe fiduciary duties to their principals. It is, of course, clear that most agents do owe fiduciary duties, but there are indications in the case law, stretching back into the 19th century, that agents are not necessarily fiduciaries towards their principals. This paper examines that material, with a view to understanding and explaining it. The earlier case law suggestions regarding non-fiduciary agencies were driven predominantly by the peculiarities of the accounting process in equity, but that still requires some explanation. In terms of the more modern suggestions, the topic is made difficult by the overlap between the protean nature of agency as a concept and the lack of a clear definition of what constitutes a fiduciary relationship. Thus, one reason for agents not always being fiduciaries is that the label “agency” has been misapplied to the relationship between the parties, which is common in business, in part because of a misapprehension as the meaning of the concept of agency and in part because it can be difficult to determine whether the circumstances of a given relationship did in fact create an agency relationship. A second reason involves the application of the recognised proposition in fiduciary doctrine that the scope of a fiduciary’s duties is moulded to the circumstances of the relationship between the parties, and those circumstances may indicate that fiduciary duties were not appropriate (or not appropriate in their normal form) to the particular relationship at hand.
William Day - The Unhappy Centenary of Said v Butt
On 11 June 1920, McCardie J handed down a short and difficult judgment in a case where a Russian émigré had sued his estranged former business partner, the managing director of the Palace Theatre, for refusing him entry on the opening night of The Whirligig. This was the case of Said v Butt  3 KB 497. The claim was for procuring breach of contract and was dismissed on two bases. First, the ticket had been acquired by an intermediary acting as an undisclosed agent for Mr Said. The judge considered that it was not possible for Mr Said to intervene on that contract. Second, Mr Butt had been acting within the scope of his authority as director of the theatre company. As its intermediary, the judge considered Mr Butt should not be treated as an accessory to any breach of contract by the theatre company.
Both aspects of the decision are challenging and have spawned difficult lines of case law and commentary. This first point reflects a deep-seated unease with the ability of third parties to make themselves privy to contracts. This paper will argue against this ‘principal’s contract’ theory. The preferable view is that the contract is only ever between agent and third party and the undisclosed principal’s rights against the third party are non-contractual in nature. The paper will assess, in that context, whether Said v Butt is better understood as a preclusionary rule emanating from the terms of the contract or is a freestanding check on the operation of the doctrine of intervention.
This paper will argue that the second point was wrongly decided (or at least wrongly understood) and should not be followed as a matter of precedent, policy or principle. McCardie J’s approach (which was obiter in light of his decision on the first point) unfortunately risks being elevated into an immunity for company directors and other agents acting within the scope of their authority. The better view is that a defence of justification is open to such intermediaries only where they have acted as an accessory to wrongdoing in discharge of the duties owed to their principals.
Deborah A. DeMott - The Platform As Agent
Although goods sold in transactions intermediated by online marketplaces can lead to physical harm in the real world, it is open to question what legal consequences follow for the platform or marketplace itself. In a series of cases involving goods sold by vendors through Amazon Marketplace, courts in the United States diverge in how to characterize Amazon’s role when defects in the goods sold through the platform cause physical injury but the vendor is insolvent or otherwise eludes legal process. Is Amazon a “seller” for purposes of products-liability law? Only an agent for the vendor? Some other sort of intermediary?
This paper argues that the concepts and doctrine of agency law provide an useful starting framework for anaalying the issues. The stakes are significant given the volume of platform-intermediated transactions plus the potential to externalize, to third parties, costs stemming from predictable risks associated with defective products. Agency doctrine has long acknowledged that an agent may have a discrete non-agency relationship—such as a debtor-creditor relationship—with the principal and that an agent may itself be subject to liability to third parties. Agency doctrines also capture, in various ways, the consequences when a party constructs the appearance that it occupies a particular role but later denies the legal implications.
Jodi Gardner and Chee Ho Tham - Debt Collection and Assignment of Debts: Navigating the Legal Maze
This paper analyses debt collectors as intermediaries of contracts between original creditors and debtors, and specifically focuses on the rights and obligations under debt collecting agreements. Debt collection is a significant – and fast growing – industry in the United Kingdom, dealing with £200 billion in loans and revenue of £2 billion. Debt collectors are an important intermediary in contracts between creditors and debtors. The debt collection process involves a legal or statutory assignment of an outstanding debt from the original creditor (the assignor) to the debtor collector (the assignee). There are many advantages associated with this process: it allows businesses to avoid the risk and practical burden of seeking repayment of outstanding amounts and to clear balance sheets. There are however a wide range of legal challenges, particularly in the context of collecting outstanding money from individuals as opposed to businesses. Despite this, there is very little research on debt collectors as intermediaries, the legal mechanisms involved in assigning a debt and what specific rights and liabilities may arise from this assignment. Generally, a debt collecting firm ‘purchases’ the debt from the original creditor at a significant discount and then obtains a profit from collecting the original debt in full, often with additional fees and charges added. A number of questions therefore arise from this process which will be addressed in the paper, including how debts are assigned, what legal rights does a debt collector have (especially regarding the collection of additional fees and charges from the debtor), and what statutory restrictions may be in place.
As well as the general points mentioned above, the paper will have a specific section on consumer debt collection – an area where there has been significant increase in activities. The impact of COVID-19 has exacerbated pre-existing financial disadvantages, increasing the volume of unpaid debts from already struggling individuals. Consumer debt collection also involves securing payment from legally unsophisticated individuals who may already be in financial hardship and may not understand the legal ramifications of debt collection. A particularly interesting question arises if the debtor repays the original creditor, as opposed to the debt collector. If this occurs, the debtor can generally be sued by the debt collector as assignee and ordered to ‘pay again’ – as was the outcome in Brice v Bannister. Whilst this approach may be justifiable in commercial contracts, it is hard to justify in the context of consumer debt collection, particularly where the individual has limited understanding of the assignment process and where the Unfair Contract Terms provisions of the Consumer Rights Act 2015 may impact the rights and liabilities of an intermediary debt collector.
Louise Gullifer and Hin Liu - Client-intermediary relations in the crypto-asset world
Crypto-assets are indisputably getting more and more popular by the day, and this is indicated by the fact that the spot trading volume for crypto is approximating that of global equities (73% and rising). Most crypto-assets are being held in ways involving intermediaries, but despite some litigation, there is little certainty as to the possible legal relationships that can arise between crypto-asset intermediaries on the one hand, and clients such as investors on the other hand. Given current market trends, it is imperative to analyse the potential types of legal relationships. This paper argues that, in common law jurisdictions, there are four possible types of legal relationships: outright title transfer, trust, quasi-bailment, and mere contractual obligation. Ultimately, which type of legal relationship exists in a particular case depends on the interpretation of the agreement between client and intermediary. In the final analysis, it is argued that the most likely legal relationship is one of trust. This is because the trust is likely to accord with the intentions of the parties. Furthermore, intermediaries would want to signal their legitimacy to potential clients, and the most obvious way is to adopt the trust as many jurisdictions require professional trustees and/or custodians to be licensed.
Matthew Harrington - Risk, Wrong, and Unjust Enrichment from Third Party Transferees
One of the more challenging problems of unjust enrichment law is its application to third-party transferees. In the normal case, as where a third-party acts as agent for a disclosed principal, claims of unjust enrichment may be addressed through an action against either the agent or the principal. The principal’s liability would appear to depend on there being some sort of privity, or nexus, between the principal and the transferor. If there is, an action in unjust enrichment seems possible because there has been a reasonably direct transfer even though it passes through an agent’s hands.
But what of indirect transfers, as where the original transferee directs the transfer to a third party who is effectively a stranger to the original transaction? Should the transferor be entitled to make a claim against the ultimate transferee in the absence of any connexion between them? On the face of it, this question would appear to have been settled in the Trident Beauty, wherein it was held that the claimant could not use an unjust enrichment claim to avoid the allocation of risk made in a contract existing between the transferee and the original transferor.
However, in two recent cases, Commonwealth courts have taken rather different approaches to this problem, one largely following the holding of the Trident Beauty and the other charting an entirely different course. The outcomes in these two Commonwealth cases reveal a different understanding of the concepts of nexus and risk. This paper will argue that the concept of risk must play a larger role in determining when a transfer ought to be reversed, especially if traditional privity rules are to be expanded. This is particularly true in cases where the ultimate transferee is innocent of wrongdoing. After all, if unjust enrichment is to remain a strict liability claim, then concepts of wrong and risk must play a larger role in the analysis
Ying Hu - Platform Liability for Terrorist Activities
In recent years, there has been growing concerns that online platforms, such as Twitter and YouTube, are being used to facilitate terrorist activities. Victims of terrorist attacks have brought a series of claims against those platforms to seek compensation for their loss. However, these claims have largely failed in the U.S. because online platforms are immune from liability under section 230 of the Communications Decency Act. In addition to section 230, victims of terrorist attacks also face difficulty establishing that online platforms provide “substantial assistance” to terrorists or that their assistance is the “proximate cause” of the attacks complained of.
This article examines the rationales both for and against holding online platforms liable for third party misconduct. It seeks to propose a more limited form of liability that arguably strikes a better balance between deterring terrorism, protecting freedom of speech, and promoting innovation.
Rachel Leow - Ministerial Agency
Cases sometimes describe some intermediaries as only acting ‘ministerially’. Mention of ministerial agents occurs in a wide range of different contexts. It has been used to refer to secretaries who merely physically deliver documents, an amanuensis who aids physically impaired individuals in signing documents, and stockbrokers who take specific instructions from clients in purchasing shares. Ministerial agency is also raised for different purposes. Sometimes, the question is whether the ministerial agent’s acts can be treated as the principal’s. It is also relevant to whether the purported delegation of ministerial acts contravenes the principle that delegated powers cannot be further delegated. Other questions concern whether the ministerial agent can be liable in conversion, for knowing receipt, or in unjust enrichment claims, or whether the ministerial agent owes fiduciary duties in respect of ministerial acts.
The aim of this paper is to investigate the concept of ministerial agency and its usefulness It focuses on three questions: (i) when does an intermediary act only ministerially?; (ii) is there a uniform conception of ministerial agency across different contexts and for different purposes?; and (ii) is the concept of ministerial agency is important and useful?. It also considers whether examples of ministerial agency are best understood as part of the law of agency, and if not, how else they might be explained.
Alexander Loke - Intermediaries as “gatekeepers” in international and domestic regulation
The use of the term “gatekeepers” is usually associated with intermediaries who play an integral role in the issue of securities or financial products. Their involvement may be key to the success of the issue, or even so critical that without their participation, the transaction cannot go ahead. This may be due to current market expectations, or to regulatory requirements for the involvement of certain intermediaries. This paper broadens the scope of inquiry into the use of intermediaries as ‘gatekeepers’ in the international financial system and corollary to that, their use in the domestic financial system. To the extent that international finance underpins international investments and the cross-border offering of financial products, the domains are linked. Indeed, some of the intermediaries play roles in both domains. Yet their use to achieve regulatory objectives has been less debated and seemingly less controversial. We will examine the use of intermediaries in the linked domains to tease out the factors which determine the efficacy of using intermediaries as a regulatory mechanism.
Laura Macgregor - Partners within UK Partnerships – Unusual Commercial Intermediaries?
This chapter explores the partner in the UK partnership as a type of commercial intermediary. It aims, broadly, to explore the way in which more general agency law and fiduciary law scholarship applies to the specific commercial context of partnerships. Ultimately, it questions whether designation of the partner as an “agent” continues to be a key factor in understanding the totality of the partner’s rights and duties. Rather, many important rights and duties are either sui generis or emanate from fiduciary (rather than agency) law.
The partnership structure poses challenges to the application of standard agency and fiduciary law principles. The partner is an unusual agent, being present at both the level of agent, and at the level of principal (as an actor who forms part of the partnership). In key respects, partnerships differ from classic fiduciary relationships. The partner is, for example, perhaps not as vulnerable as other types of principals. Rules on secret profits apply with difficulty where the partner in fiduciary breach shares in secret profits disgorged to the partnership. These facts should lead us to question whether the designation as “agent” continues to be as important in understanding the totality of partnership law (beyond the partner’s ability purely to bind the firm). This perhaps mirrors developments in agency case law, as we question whether the label “agent” necessarily determines the extent of fiduciary duties (Prince Arthur Ikpechukwu Eze v Conway and anor  EWCA Civ 88).
A key problem is the need to unravel the interaction of good faith and fiduciary duties within partnerships. In this exercise, partner to partner duties, on the one hand, and partner to firm duties, on the other, must be differentiated. Of particular interest is the heightened relevance of partner to partner duties at times of “stress” within partnerships, for example where an individual partner is being excluded from, or is resigning from, the partnership (as illustrated recently by Rennie v Rennie  CSOH 49). It may be possible to draw on scholarship (Nolan and Conalgen) on what it means for fiduciaries to act in good faith.
The chapter will take into account differences between Scots law (where the partnership is a separate juridical person) and English law (where it is not). Analysis will draw upon different types of partnerships: the partner formed under the Partnership Act 1890; limited partnerships and limited liability partnerships.
Ben MacFarlane and Andreas Televantos - As Complex as ABC? Protecting Third Parties from Unauthorised Acts of Intermediaries
Our paper discusses a commercially crucial aspect of English law’s response to the problem of intermediaries acting without authority. If A manages B’s property or affairs and, without authority, enters into a transaction with C, what is the impact on C of A’s lack of authority? The problem can be simply stated and applies generally, across a range of different intermediary relationships. Yet the response of English law is complex and varies according to factors such as the nature of the relationship between A and B, the nature of the right A purported to grant C, and the type of asset the rights relate to. This has led to calls for English law to adopt a simpler, unified approach, fit for commercial purpose.
We argue, however, that there are good reasons for English law’s current approach, and for different rules to apply based on the specific type of intermediary relationship between A and B. Complexity is not always needless. The law enhances party autonomy by offering A and B a range of forms for structuring their relationship with different third party effects. This is justified where (i) courts can clearly distinguish between different kinds of intermediary relationships and (ii) third parties are only bound by different kinds of such relationships in limited and clearly defined ways. We suggest that problems created by the current priorities rules for commercial parties can be largely addressed with two modest changes that would not require legislation: by aligning the rules protecting bona fide purchasers of certain equitable interests with those protecting such purchasers of legal interests; and by expanding the notion of what constitutes ‘holding out’ for the purpose of the ostensible authority doctrine. Such reforms can be justified by reference to principles which were historically part of the common law, and would have the effect of routinely upholding reasonable commercial values and expectations in priorities disputes.
Gerard McMeel QC - Agency Theory Revisited and Practical Implications
There has been renewed interest in the theoretical foundation of the law of agency over the last two decades. As a pervasive commercial law technique the underlying basis of representation and authority has enormous practical significance. The core concepts of actual and apparent authority, disclosed and undisclosed agency, and associated clusters of rules around ratification and breach of warranty of authority are reviewed. There are also important interactions with principles of vicarious liability and the attribution of knowledge. The philosophical foundations of the topic are revisited with an eye to the practical implications. Whilst uneven, the trend in recent case law has been to take a restrictive approach to apparent authority, vicarious liability and statutory interventions in the law of agency. This reluctance to impose wider liability on those who engage and utilise intermediaries in increasingly complex markets and structures is critically assessed.
Sarah Paterson - Insolvency Practitioners and the Leveraging of Intermediary Power
The legislative provisions for company voluntary arrangements (CVAs) appear to contemplate a classic intermediary role for the insolvency practitioner in the procedure. Assuming that the company is not in administration or liquidation, the directors of the company make a proposal to the company and its creditors for a composition of its debts or a scheme of arrangement of its affairs. The insolvency practitioner is appointed as the ‘nominee’ (before the CVA is voted on) or the ‘supervisor’ (after the CVA has been approved) for the purpose of supervising the implementation of the composition or arrangement. We are left in no doubt that it is the directors who are in the driving seat and that the insolvency practitioner is appointed to sit between the company and its creditors, initially overseeing the stages of proposing the CVA and subsequently supervising its successful implementation. Indeed, the CVA is often described as the UK’s only debtor-in-possession insolvency procedure.
The Cork Committee originally conceived of the CVA as a procedure for a small company proposing a simple composition or arrangement to its general body of creditors. However, starting with the CVA for JJB Sports PLC in 2009, insolvency practitioners, particularly those associated with a particular firm of accountants, have worked with debtor company clients to adapt the CVA to achieve a compromise of rental liabilities: so-called landlord only CVAs. These CVAs are not ‘simple’ compositions or arrangements for ‘the general body of creditors’ and many of the companies proposing them are very large indeed. In short, they are a very long way from the original conception of the CVA in the Cork Report, and the role of the insolvency practitioner in developing, negotiating, and implementing them has gone far beyond an intermediary role. Through a case-study examination of this phenomenon, the paper will examine how insolvency practitioners have leveraged the intermediary role envisaged for them in the legislation to shape a new procedure in the interests of their clients.
Magda Raczynska - The legal structure of intermediary asset holdings
It is common for intangible assets, such as securities or cryptocurrencies, to be held and dealt with by intermediaries for investors but the legal nature of such custodial relationships continues to be debated. Under English law, a popular view in relation to securities is that they are held on trust for the investors, or at least that they held for the investors in a way that provides them with a right against the intermediary’s right (SL Claimants v Tesco Plc  EWHC 2858). In relation to cryptocurrencies, while the trust model is gaining traction in the common law world (see Ruscoe v Cryptopia Ltd (in Liquidation)  NZHC 728), a view has emerged that bailment, or at least its analogue, would protect investors even better. On an assumption that bailment could apply to at least some types of intangible asset, this paper goes on to examine the comparative value of those two models - trust and bailment - in the way they treat investors in two important respects.
The first is the protection of investors from interferences with the intermediated assets. It is argued that protection under the trust model is more robust than protection through the tort of conversion, espoused by the bailment-model proponents. The second is the allocation of losses among investors where there is a shortfall in the pooled fund, i.e. the quantity or value of the asset credited to the intermediary’s account exceeds the quantity or number that the intermediary holds. It is argued that the application of tracing rules on the trust model provides better protection than the bailment model. In addition, it is argued that, with some adjustments, tracing rules can provide satisfactory protection to investors, and they are, additionally, more fine-tuned to different classes of investors (and therefore provide better protection) than that under, e.g. the US law, which allows for a pro rata distribution of losses, relative to the value of the holdings, irrespective where the shortfall lies.
Hans Tijo - Adjudicating Intermediary-Related Losses
To avoid the use of intermediary analysis, we try to see principal to principal transactions where possible in the financial markets. Three-party situations are problematic due to the agency, information and administrative costs involved. This includes the substitution of parties in relationships characterized as choses in action, which is why we see them as property transfers even if that is not fully accurate. We also create separate personality to help compress the number of parties involved in a transaction but that still contains separate layers within an artificial entity. It is not possible to fully avoid the use of intermediary analysis once there are dealings with the outside world in situations of co-ownership of property or co-sharing of power and so the goal is to keep costs low.
The problem is not with agency costs as principals are well protected today. But that then shifts informational costs to third parties, particularly if objective standards are imposed on them. This lowers the administrative costs of adjudication but if so we need to get those standards right in order minimize total costs. At the moment much of the work is done through the doctrine of notice and burden of proof, which could turn on how a case is pleaded. This may be too onerous for third parties and could in fact increase transactional costs if principals are not incentivized to control agency costs. There needs to more notice-creating mechanisms and perhaps more principled ways to apportion losses.
Christian Twigg-Flesner - Regulating Online Intermediary Platforms: Contracts, Networks, or Something Else?
Online Intermediary Platforms (OIPs) are ubiquitous in both consumer and commercial settings. Many of the leading platforms (Uber, Airbnb, Amazon, and eBay) have been the subject of litigation and some targeted regulation in many jurisdictions. Much of these interventions have been concerned with platforms through which goods or services are provided to consumers and focus on improving consumer protection. However, the focus on consumer platforms ignores the growth of OIPs for commercial transactions, including international commercial transactions. These will be the focus of this paper.
As yet, no consistent approach to regulating OIPs has emerged. Indeed, there is still a lack of clarity about the extent of an OIP’s role in enabling the negotiation and facilitation of transactions – some may be nothing more than an intermediary, bringing two parties to a contract together. Others, however are much more active in managing the way transactions are concluded and performed. In some instances, the operator of an OIP acts like a de facto controller for the market created by the OIP by acting as a gatekeeper controlling who can access the OIP and on what conditions transactions can be concluded.
This de facto role of an OIP as a market-maker and market-controller invariably creates a challenge for legislators/regulators. Current initiatives have tended to adopt a traditional analysis. For instance, Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services targets the individual contracts between an OIP operator and business seeking to sell their products through that OIP. In focusing on individual contracts, the legal analysis of an OIP is reduced to endless sets of 3 contractual relationships (OIP-supplier; OIP-customer; supplier-customer). However, such an analysis fails to capture the complexity and interconnectedness of the many relationships on an OIP. If the chosen regulatory route to focus on contractual relationships, a more sophisticated analysis is needed which takes into account their relational nature and the fact that each contract is part of a network of contracts. However, this does not mean that a contract-based approach is necessarily the best way of regulating OIPs. An alternative approach would take the market-making and market-controlling role of an OIP operator as the starting point for regulation and develop a regulatory strategy with this conception of an OIP operator at its heart. This paper will explore both the potential and limitations of a primarily contract-focused approach to regulating intermediaries, and set out what an alternative market-focused approach might look like.
Andrew Goodwin, Wai Yee Wan, and Yao Qinzhe - Operationalising the Duty of Care on Financial Adviser as Intermediaries to Individuals and Households
Recently, the UK Financial Conduct Authority has engaged in a wide-ranging consultation on whether legislation should introduce a statutory duty of care on financial advisers providing advice to consumers, which is in addition to the existing duties imposed under private law. This consultation was in response to the widespread misconduct by financial intermediaries in the provision of financial advice or the sale of financial products to consumers, and the realisation that leaving the matter to market forces to resolve does not lead to optimal outcomes for consumers. Using Australia as a case study, we make a different argument; we argue for the imposition of a broad-based duty of care but we do not stop there. By itself, a broad-based duty only has the effect of a box ticking exercise without bringing about substantive changes in financial intermediary conduct. In Australia, a broad-based ”best interests” duty has been statutorily imposed on financial intermediaries in respect of the provision of personal advice to retail clients. However, it has come to be viewed as a safe harbour where compliance with the steps in the legislation is regarded as sufficient, and has not led to satisfactory resolution of inherent conflicts of interests faced by these intermediaries. By focusing on the safe harbours, advisers assess the kinds of advice or products that a hypothetical ‘reasonable investor’ would expect to receive or purchase. Other recently enacted obligations require issuers and distributors to ensure that financial products are sold only to consumers for whom the product is “appropriate”, but assessment of appropriateness is again based on the hypothetical reasonable person in that class of retail consumers.
As a solution, we argue that any duty of care in respect of individuals or households should not be premised upon protecting hypothetical investors (or a class of investors). Instead, we propose the design and adoption of a framework that helps financial advisers to identify the financial well-being needs of specific individuals or households. Such a framework would be overseen by a new governmental agency in consultation with other government departments, financial sector participants and consumer groups. The sale of non-standardised financial products and the provision of non-standardised advice to individuals or households would need to comply with this framework.
Sarah Worthington QC - The special problems of intermediaries exercising powers by majority vote
This chapter examines the special difficulties that arise when the ‘intermediary’ in the sightlines is a group that has to exercise its power by majority vote. This is a relatively common feature of corporate and creditor decision-making in a variety of commercial contexts, and these will provide the primary illustrations. The legal issues that arise include not only the question of what constraints apply to the exercise of the power, and would equally apply if an individual intermediary were given a discretion in question (ie whether the power has to be exercised in good faith and for proper purposes, etc), but also whether additional constraints apply to the exercise of power in order to protect the ‘dissenters’ within the group who will be dragged along by the majority vote. Further, this chapter considers what we mean when we say these types of majority powers must be exercised ‘in good faith in the interests of the [group]’, and, finally, how we decide whether the exercise of the power is flawed if some but not all of the participants can be shown to have acted improperly.
- Speaker biographies
Roger Alford is Professor of Law at Notre Dame Law School and Concurrent Professor in the Keough School of Global Affairs. From 2017 to 2019 he was the Deputy Assistant Attorney General in the Antitrust Division of the Department of Justice. Since 2019, he has been an expert consultant for the Texas Office of Attorney General in the case of Google v. Texas.
Matthew Conaglen is the Professor of Equity and Trusts at the University of Sydney Law School, having previously been a Reader in the Faculty of Law at the University of Cambridge. He teaches and researches in the fields of equity, trusts and obligations. He is the author of Fiduciary Loyalty: Protecting the Due Performance of Non-Fiduciary Duties (2010), and a co-author of Snell’s Equity (34th ed, 2020), as well as numerous book chapters and articles in leading journals. His writing has been cited by the Supreme Court of the United Kingdom, the High Court of Australia, the Supreme Court of New Zealand, the Court of Appeal of Singapore and the Hong Kong Court of Final Appeal, as well as numerous lower-level courts in those jurisdictions. Prior to becoming an academic, he practised at a major New Zealand law firm, where he was involved in a wide range of commercial litigation, and he is an Academic Barrister in New South Wales.
William Day is a barrister at 3 Verulam Buildings in London and a fellow of Downing College, Cambridge
Deborah A. DeMott is the David F. Cavers Professor of Law at Duke University School of Law. She served as the sole Reporter for the Restatement (Third) of Agency for the American Law Institute, published in 2006. Her other publications focus on fiduciary obligation, a wide variety of agency relationships, plus business organizations and fundamental corporate transactions. She has held secondary or visiting appointments at other universities, including Central European University, the University of Sydney, Osgoode Hall Law School, and the London School of Economics.
Jodi Gardner is a University Lecturer in Private Law at the University of Cambridge, a Fellow of St John’s College, and an Adjunct Senior Research Fellow at the Centre for Banking & Finance Law, NUS. Jodi has previously held visiting positions at Princeton University, Columbia Law School, Max Planck Centre for International and Comparative Private Law, the Centre on Household Assets and Savings Management (University of Birmingham) and Griffith University, Australia. Jodi’s research is primarily focused on how private law interacts with social policy and social welfare, including the limitations of doctrinal law in responding to the challenges posed by poverty and inequality. She has written on a variety of different topics in this area including the regulation of high-cost credit contracts, the impact of austerity measures, the effect of open banking on financial exclusion, online auctions, and concurrent liability in tort and contract.
Andrew Godwin is Associate Professor; Director of Transactional Law; Director of Studies for the Graduate Program in Banking and Finance Law and Associate Director of the Asian Law Centre at Melbourne Law School. Prior to joining Melbourne Law School in 2007, Andrew was in legal practice for over 15 years, 10 of which were spent in Shanghai as a partner of an international law firm. Andrew researches in the area of finance and insolvency law, financial regulation, property law and the regulation of the legal profession. Andrew has published extensively in both academic and professional journals and is a co-author of Sackville & Neave Australian Property Law (11th edition, 2021). His PhD thesis examined traditional land-use rights in rural China and evaluated their relevance and suitability to reform today. Andrew has acted as a consultant to a broad range of organisations, including the World Bank and regulators and governments in Australia and abroad. He is the co-editor of two books to be published this year: The Cambridge Handbook of Twin Peaks Financial Regulation(Cambridge University Press) and Innovation, Technology and Corporate Law (Edward Elgar). Andrew is currently on secondment to the Australian Law Reform Commission as Special Counsel to assist in its inquiry into corporations and financial services regulation in Australia.
Professor Louise Gullifer QC (hon) FBA is Rouse Ball Professor of English Law at the University of Cambridge, and a fellow of Gonville and Caius College, Cambridge. She was formerly Professor of Commercial Law at the University of Oxford and a fellow of Harris Manchester College. She is an associate member of 3VB, where she practiced for a number of years, and a Bencher of Gray’s Inn.
Matthew P. Harrington is Professor of Law and Director of the Programme in Common Law in the Faculty of Law in the Université de Montréal. He holds degrees from McGilll University (B.Th.), Boston University (J.D.) and the University of Pennsylvania (S.J.D.). Mr. Harrington teaches and does research in the area of property, trusts, and equity.
Ying Hu is a Lecturer at the National University of Singapore and a J.S.D. candidate at Yale Law School. She received her LL.B. degree from the University of Hong Kong and LL.M. degrees from the University of Cambridge and Yale Law School respectively. She has worked as a Judicial Assistant at the Hong Kong Court of Final Appeal and taught tort law at the University of Hong Kong.
Ying's areas of interest include information privacy, law and technology, and property law. Her articles have appeared in journals such as the University of Michigan Journal of Law Reform, European Business Organization Law Review, Cornell Journal of Law and Public Policy, Common Law World Review, and Restitution Law Review.
Rachel Leow is an Assistant Professor at the National University of Singapore. Prior to joining NUS, she completed postgraduate degrees at the University of Cambridge, where she won the Chancellor’s Medal for English Law and the Gareth Jones Prize for the Law of Restitution. Rachel researches and teaches widely across the areas of agency law, restitution, and trusts law. Her work on these topics has appeared in journals including the Cambridge Law Journal and Lloyds Maritime and Commercial Law Quarterly. She is currently completing a monograph titled ‘Corporate Attribution in Private Law’, forthcoming with Hart Publishing.
Hin Liu: Legal and Business Consultant, Fusang; Lecturer of Law and DPhil Candidate, University of Oxford
Alexander Loke JSD, LLM (Columbia), LLB (Hons)(NUS) is Professor at the City University of Hong Kong School of Law, and Director of the Hong Kong Commercial & Maritime Law Centre. Loke was the founding chief editor of the Asian Journal of Contract Law and was also one of the founders of the NUS Centre for Banking & Finance Law launched in 2014. Loke publishes widely in contract law, corporate and securities law, and international finance. He was a co-editor in vol. 1 (Remedies for Breach of Contract) and vol. 2 (Formation and Third Party Beneficiaries) in the series Studies in the Contract Laws of Asia (Oxford University Press). Representative publications include: “Excusable Consent in Duress” (2017) 37 Legal Studies 418, “Rethinking the transplantation of TSC Industries v Northway in Singapore” (2013) 28 Aus J Corp Law 253, and "From the Fiduciary Theory to Information Abuse: The Changing Fabric of Insider Trading Law in the U.K., Australia and Singapore" 54 Am J Comp L 123 (2006).
Laura Macgregor is Professor of Scots Law at the Law School, University of Edinburgh. She began her academic career as a lecturer in commercial law at the University of Glasgow. Before becoming an academic, she spent five years in legal practice working as a solicitor in a large Edinburgh law firm. She has strong links with Radboud University, Nijmegen, where she was formerly Visiting Professor in International Commercial Law.
Laura’s research interests lie in the commercial dimensions of contract law, in particular the specific contracts of partnership and agency. She is the author of the major monograph, ‘Agency Law in Scotland’ (2013), and is currently working on a monograph on Scottish Partnership Law to be published in the Scottish Universities Law Institute series. Much of Laura’s work is comparative in nature, with a specific focus on ‘mixed’ legal systems, in other words, legal systems which, like Scots law, comprise a civil law foundation overlaid with influence from the common law. In this comparative vein, she has published articles which compare Scots law with South African law and Louisiana law.
Laura retains close links with legal practice, providing continuing professional development
training to the solicitors’ profession and the judiciary in Scotland. Her annual Contract Law Update is delivered in May of each year, at locations including Edinburgh, Glasgow, Aberdeen, and by video conference to the Highlands and Islands. She is a panel member of Sub-Panel 18 for REF 2021.
Ben McFarlane is Professor of English Law at the University of Oxford and a Fellow of St John’s College, Oxford. His research focusses on the interaction of the law of property and the law of obligations and his recent publications include The Law of Proprietary Estoppel (OUP, 2nd edn, 2020).
Gerard McMeel QC is a leading commercial, banking and financial services lawyer, both as an academic and practitioner. He was appointed Queen’s Counsel in March 2020, and practises from Quadrant Chambers, London. As an academic lawyer, he specialises in contract law, commercial law, banking and financial services law and regulation, He is the author of a leading text on the construction of commercial contract. He has held Chairs at three UK universities. From 2020 July he is the Professor of Commercial and Financial Law, and the Director of the Centre for Commercial Law and Financial Regulation, at the University of Reading, UK. Gerard was previously the Professor of Commercial Law at the University of Manchester, a Professor of Law at the University of Bristol, and is a prolific legal author. He has held visiting positions at Duke University, Tel-Aviv University, the University of South Carolina, Hong Kong University and Singapore Management University.
Sarah Paterson is an Associate Professor of Law at the London School of Economics and Political Science where she teaches and researches corporate insolvency and restructuring law. Before joining the LSE, Sarah was a partner in the Restructuring and Insolvency Group of Slaughter and May, with whom she retains a senior consultancy. She has written widely on the topic of corporate bankruptcy and debt restructuring, including on bargaining in the shadow of restructuring law, the implications of increasing access to the US high yield market by UK issuers for debt restructuring, the implications of changes in the finance market in the UK and the US for debt restructuring theory, and how fairness is assessed in large, small and finance company restructurings in both jurisdictions. She co-authors the comparative US and UK corporate section of Debt Restructuring with Alan Kornberg; edits McKnight, Paterson and Zakrzewski on the Law of International Finance with Rafal Zakrzewski; and is the author of a new monograph, Corporate Reorganization Law and Forces of Change, published by OUP in 2020. Sarah is a member of the Council of the Insolvency Lawyers’ Association, the technical committee of the Insolvency Lawyers’ Association, III, and the General Technical Committee of R3.
Yao Qinzhe has been practicing law independently in Singapore after obtaining a Juris Doctor from the Singapore Management University in 2014 and a Bachelor of Civil Law from the University of Oxford in 2016. As a Counsel in the Singapore firm of Skandan Law LLC, he mainly deals with civil and commercial matters. Qinzhe handles both contentious and non-contentious matters, with a focus on equity and trusts, the conflict of laws, shareholder disputes, and insolvency. He is regularly consulted by other lawyers for opinions and advice on their matters. Qinzhe has also taught as adjunct faculty in the Singapore Management University, has published together with leading academics in the field of financial regulation, and has also been cited in the latest edition of Dicey, Morris & Collins on the Conflict of Laws.
Magda Raczynska is Associate Professor of Law at UCL, where she teaches Commercial Law, Commercial Remedies, Property as well as International and Comparative Secured Transactions. She is also a Co-Director of the Secured Transactions Law Reform Project, a member of the Advisory Board (Secured Transactions Code) of the City of London Law Society, and a member of the Consulting Editorial Board at LexisPSL Banking & Finance. Previously, she was a lecturer at University of Bristol, and a Visiting Lecturer at the German Judicial Academy in Trier.
She writes on English and comparative law of personal property, trusts and obligations. She is the author of The Law of Tracing in Commercial Transactions (OUP 2018), which was shortlisted for the Peter Birks Prize for Outstanding Scholarship, a co-editor of and contributor to Contents of Commercial Contracts: Terms Affecting Freedoms (Hart 2020), a contributing author to McKnight, Paterson and Zakrzewski on the Law of International Finance (OUP 2017) and recently joined the editorial team of Snell's Equity.
Andreas Televantos is an Associate Professor at the University of Oxford and Hanbury Fellow in Law at Lincoln College. His research focusses on equity and trusts, particularly in the commercial context.
Chee Ho Tham is Professor of Law at the Yong Pung How School of Law, Singapore Management University. He received his LL.B. from the National University of Singapore in 1994, and the BCL and DPhil from Oxford University in 1998 and 2017. His monograph, Understanding the Law of Assignment was published by the Cambridge University Press in 2019. He is also a contributor to The Law of Contract in Singapore (Singapore: Academy Publishing, 2012), the leading contract law textbook in Singapore. Although his current focus is on the law of assignment, he has written on private law topics ranging from contract remedies to cross-border insolvency. His work has been published in many journals, including the Cambridge Law Journal, the Law Quarterly Review, the Lloyds Maritime and Commercial Law Quarterly, the Journal of Equity, the Journal of Contract Law, and the Conveyancer and Property Lawyer.
Hans Tjio teaches at the Faculty of Law, National University of Singapore and is Director of the EW Barker Centre for Law and Business. He has published in international and local journals, and has written or co-written books on company law, securities regulation and trust law. He is also a contributor to Halsbury's Laws of Singapore on contract law and to Palmer's Company Law (Geoffrey Morse ed). He has been a visiting professor at National Taiwan University, Auckland and Shanghai's ECUPL.
Christian Twigg-Flesner is Professor of International Commercial Law at Warwick University. He is published widely on European Consumer and Contract law, including Rethinking EU Consumer Law (with Geraint Howells and Thomas Wilhelmsson) and The Europeanisation of Contract Law (2nd ed, 2013), as well as editing the Cambridge Companion to European Union Private Law and the Research Handbook on EU Consumer and Contract Law . His research focus is on the implications of the digital economy for Contract, Commercial and Consumer law but he is also interested in other contemporary challenges for Consumer Law, particularly its internationalisation and the importance of sustainability. He is co-editor (Law) of the Journal of Consumer Policy, Fellow of the European Law Institute and council member (2019-2023), Associate academic fellow of the Honourable Society of the Inner Temple, and a member of the recently founded Innovation and Technology Law Laboratory.
Wai Yee WAN is Associate Dean and Professor at City University of Hong Kong. Prior to joining City University of Hong Kong in January 2020, she was at Singapore Management University (SMU), where she last held the positions of Dean of Post-graduate Research Programmes and Professor of Law. Immediately prior to joining academia in late 2005, she was a partner at Allen & Gledhill in Singapore, where she practised in mergers and acquisitions and equity capital markets. Her main areas of research are in corporate law, mergers and acquisitions, securities regulation, financial consumer regulation and global restructuring and insolvency. Her research work centres on the optimal legal institutions and governance framework in order for securities markets to flourish. She has a particular interest in Asian securities markets and why the solutions to corporate governance issues, securities market integration and reorganisation of distressed companies in the West (the United Kingdom (UK) and the United States (US)) may not be ideal as a basis of global best practice or may not work as intended in Asia. Her publications have appeared (or have been accepted) in books and in international peer-reviewed legal journals, including American Journal of Comparative Law, Journal of Empirical Legal Studies, European Business Organisations Law Review, Journal of Corporate Law Studies, Journal of Business Law, Company and Securities Law Journal and Lloyds’ Maritime and Commercial Law Quarterly.
Sarah Worthington DBE QC (Hon) FBA, Downing Professor of the Laws of England and Fellow of Trinity College Cambridge.
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