Duty of care?

Photo by Nina Strehl on Unsplash

I have been thinking about the duty of care today – partly because I’m now teaching the Law of Delict (or Tort) to several groups of students and, partly, because of a story which has just been reported in the British media.

The story in question involved the tragic death of 15 year old Nora Anne Quoirin at a holiday resort in Malaysia in 2019. Nora, who had learning difficulties, wandered away from her parents’ accommodation at the resort and her body was found 10 days later in the jungle.

Nora’s parents are now suing the resort for breach of its duty of care to their daughter. They are alleging that the resort owners were negligent in that they failed to take basic safety measures which contributed to their daughter’s death.

Normally, 15 year olds would be expected to appreciate that certain behaviours or conduct on their part could put themselves in harm’s way, but Nora’s parents are arguing that she was particularly vulnerable because of health issues that she had suffered from early childhood. In other words, Nora may not have appreciated the full extent of the risk that she was undertaking when she left her room on that fateful evening.

A link to the story as reported in The Guardian can be found below:

https://www.theguardian.com/world/2020/jan/21/nora-anne-quoirin-parents-of-irish-girl-found-dead-in-malaysia-sue-resort-owner

Negligence is harm caused unintentionally and is, by far and away, the most likely type of delictual action that the Scottish courts will have to deal with.

Negligence claims arise because the defender owes what is known as a duty of care to the pursuer and, unfortunately, a breach of this duty occurs and, as a result, the defender suffers loss, injury or damage.

The leading case for negligence claims is Donoghue v Stevenson [1932] UKHL 100 – or the snail in the opaque ginger beer bottle as many generations of law students remember it.

Delicts which are committed unintentionally by the defender resulting in loss, injury or damage to the pursuer are the most common type of civil wrong. In these situations, the defender is said to have been negligent or careless. The law, therefore, imposes a duty on each of us not to cause harm to others. Each of us has interests which the law protects, for example, the right to personal security and the right to enjoy a good reputation.

Donoghue v Stevenson [1932] was not the first case of its kind to be brought before the Scottish courts. That particular honour must go to Mullen v A G Barr & Co Ltd [1929] SC 461 where the pursuer attempted to bring a compensation claim in a situation where dead mice were found in ginger beer bottles by the Mullen siblings. Unfortunately, for the Mullen children, the Court of Session dismissed their claim that there was no legal relationship i.e. between them and the ginger beer manufacturer. The importance of the Donoghue decision was that it would overrule the limitations imposed by Mullen and it would establish that a duty of care could arise between the manufacturer (Stevenson) and the ultimate consumer (Mrs Donoghue).

In order to succeed when bringing a negligence claim before the courts, the pursuer must show that the defender owes a duty of care, that the defender was in a position to cause harm and that the defender failed to prevent this foreseeable kind of harm from occurring. Additionally, the pursuer must show that the defender’s breach of duty was the effective (or proximate) cause of the loss or harm suffered by her.

Lord Atkin who gave the leading speech in Donoghue v Stevenson [1932] went to great pains to stress a concept which has since become known as the neighbourhood principle:

The rule that you are to love your neighbour becomes, in law, you must not injure your neighbour; and the lawyer’s question, ‘who is my neighbour?’ receives a restricted reply, ‘you must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour’. Who then, in law, is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in my contemplation as being so affected when I am directing my mind to the acts or omissions which are called into question.

The defender does not owe a duty of care to the whole wide world, but only to those individuals whom the defender, if he were a reasonable person, would realise that his actions might cause them to suffer loss, injury or damage. Basically, the defender should have realised that his actions or failure to act will result in certain negative consequences being suffered by the pursuer.

This was a point forcefully driven home in the famous decision of Bourhill v Young [1943] AC 92, where it was held that a deceased motorcyclist (John Young) owed absolutely no duty of care to a bystander (Mrs Bourhill) who came up Edinburgh’s Colinton Road to view the aftermath of the accident which had been caused by the motorcyclist’s dangerous behaviour. The bystander was not within the contemplation of the motorcyclist. Put simply, she was not someone whom he should have realised might be endangered by his dangerous and negligent actions. In fact, she was in no danger at all from John Young’s actions (until she placed herself in danger by going up the road to gaze upon the aftermath of the accident).

Similarly, this was a point also raised in the more recent case of Weddle v Glasgow City Council [2019] SC EDIN 42 where the pursuer’s claim for damages for psychiatric injuries was dismissed by the All Scotland Sheriff Personal Injury Court. Danielle Weddle was not someone that the driver of the vehicle (which caused death and destruction in Glasgow City Centre in December 2014) should have contemplated might be harmed by his breach of duty i.e. driving the City Council’s bin lorry whilst medically unfit to do so.

Related Blog Article:

https://seancrossansscotslaw.com/2019/12/10/post-traumatic-stress-or-psychiatric-injuries/

Conclusion

In Donoghue v Stevenson [1932], Lord Atkin deliberately drew upon the Christian parable of the Good Samaritan when he formulated the neighbourhood principle. For those unfamiliar with the parable, the Jewish man (who had been attacked and robbed by brigands and left for dead on the road to Jericho) was rescued by a Samaritan (an individual who belonged to a group detested by the Jews for their failure to adhere to the more rigorous rules of Judaism). Before the Samaritan came down the road, a Priest and a Levite stumbled upon the aftermath of the robbery, both decided not to intervene and passed by on the other side of the road.

Lord Diplock, sitting in the House of Lords, famously stated in Dorset Yacht Co. Ltd v Home Office [1970] UKHL 2 that despite the questionable morality of their decision not to help the injured man, the Priest and the Levite would have incurred absolutely no civil liability in English law for their actions and, indeed, in Scotland the position would have been exactly the same.

Lord Atkin’s statement is initially misleading in that he deliberately subverted the language of the Christian Gospels by referring to your neighbour. When Jesus Christ was asked the question by the lawyer (in Luke’s Gospel where the Parable of the Good Samaritan is to be found): ‘Lord, who is my neighbour?’ the fairly daunting reply that the lawyer received is that ‘Everyone is your neighbour’.

To lawyers, however, the above question receives a much more restricted answer. The defender does not owe a duty of care to the whole wide world, but only to those individuals whom the defender, if s/he were a reasonable person, would realise that their actions might cause others to suffer loss, injury or damage. Basically, the defender should have realised that their actions or failure to act will result in certain negative consequences being suffered by the victim.

It will be interesting to see how the legal action brought by Nora Quoirin’s parents against the owners of the Malaysian holiday resort progresses.

Copyright Seán J Crossan, 22 January 2020

Criminal evidence & vulnerable witnesses

Photo by Marco Albuquerque on Unsplash

Today, the Vulnerable Witnesses (Criminal Evidence) Scotland Act 2019 comes into force.

This piece of legislation, passed by the Scottish Parliament, was given Royal Assent in June 2019.

It represents the introduction of an innovative change to Scots criminal law. The new law will permit vulnerable witnesses to pre-record their evidence in advance of trial so that they will not be required to appear in court in person.

According to a Scottish Government press release (see link below), a vulnerable witness is defined in the following terms:

‘[if] they are likely to suffer significant risk of harm as a result of giving evidence. This includes victims of sexual assault, domestic abuse, trafficking and stalking, and those under the age of 18.’

https://www.gov.scot/policies/victims-and-witnesses/pre-recording-of-evidence-criminal-trials/

For children aged under 18, in particular, the Act permits the evidence to be taken by commissioner. This procedure will be disregarded if it would significantly prejudice the interests of justice.

The Scottish Government has noted that the new legislation consolidates changes that were made in 2014 to safeguard the rights of vulnerable witnesses i.e. the Witnesses and Victims (Scotland) Act 2014.

Links to both pieces of legislation can be found below:

http://www.legislation.gov.uk/asp/2014/1/contents

http://www.legislation.gov.uk/asp/2019/8/enacted

Related Blog Article:

https://seancrossansscotslaw.com/2019/03/20/vulnerable-witnesses/

Copyright Seán J Crossan, 20 January 2020

The plumber’s arm

Photo by pan xiaozhen on Unsplash

The latest Blog title sounds like the name of a quaint English or Scottish public house, but as you might expect it relates to matters legal.

This last week, I have just begun to teach my First Year university students about the law of delict (or tort in other common law jurisdictions) and, as always, I’m looking for relevant cases or stories in the news to illustrate this area.

Obligingly enough, a report of a case came through on Friday 17 January 2020 about a plumber called Darren Conquer who has just been awarded £540,000 in damages by the Outer House of the Court of Session as a result of being the victim of medical negligence (see Darren Conquer v Lothian Health Board [2020] CSOH 8).

As I often say to students the basis of the law of delict is loss or injury wrongfully caused (or as the Romans would have said: damnum injuria datum).

Mr Conquer had injured his arm while playing football and he had, subsequently, undergone medical treatment for this. This is where it gets interesting: the injury had occurred some 16 years ago, but Conquer was not suing the person or persons who had injured him during the football match.

This is, of course, where the issue of volenti non fit injuria arises. When you engage in a physical sport, like football, you must accept the risk of possible injury – on the proviso that all of the players conduct themselves properly and within the rules of the game.

The basis of the pursuer’s claim was that the Health Board, as the employer of the doctors who treated him, was vicariously liable because the injury to the arm been misdiagnosed and, consequently, the proper medical procedures had not been followed. Put simply, the pursuer was arguing that the Health Board was culpable or at fault for his losses.

Had the correct diagnosis been made by the doctors and the correct treatment applied, the pursuer would have made either a full recovery or nearly a full recovery and would have been able to return to his job within 6 months of sustaining the injury. The real issue seems to have centred around the failure by the doctors to carry out surgery on the pursuer at a much earlier and vital stage of his treatment.

In short, the medical negligence was the primary cause (the causa causans) of the pursuer’s losses i.e. his inability to work at his chosen trade of plumber (a skilled trade where he had the potential to make a good living).

The doctors treating Conquer owed a duty of care to him and they had been negligent in the manner of both the diagnosis of the severity of the injury and the treatment which followed (or didn’t follow perhaps more accurately).

A link to the opinion of Lady Carmichael in the Outer House can be found below:

https://www.scotcourts.gov.uk/docs/default-source/cos-general-docs/pdf-docs-for-opinions/2020csoh8.pdf?sfvrsn=0

Related Blog Articles:

https://seancrossansscotslaw.com/2019/04/03/where-theres-blame-theres-a-claim/

https://seancrossansscotslaw.com/2019/08/05/an-unfortunate-error/

https://seancrossansscotslaw.com/2019/12/09/howzat-or-volenti-again/

https://seancrossansscotslaw.com/2019/12/13/joint-and-several-liability/

https://seancrossansscotslaw.com/2019/12/10/post-traumatic-stress-or-psychiatric-injuries/

https://seancrossansscotslaw.com/2019/02/15/i-wish-i-hadnt-done-that/

https://seancrossansscotslaw.com/2019/11/19/i-wish-i-hadnt-done-that-continued/

https://seancrossansscotslaw.com/2019/02/22/stress-kills/

https://seancrossansscotslaw.com/2019/12/23/act-of-god/

https://seancrossansscotslaw.com/2019/04/19/dont-stop-the-music/

https://seancrossansscotslaw.com/2019/01/25/foreign-objects-or-ive-got-a-bone-to-pick-with-you/

https://seancrossansscotslaw.com/2019/12/30/foreign-objects-or-ive-got-a-bone-to-pick-with-you-part-2/

https://seancrossansscotslaw.com/2019/01/26/volenti-non-fit-injuria-or-hell-mend-you/

Copyright Seán J Crossan, 20 January 2020

So long to EU?

Photo by Olia Nayda on Unsplash

Just when the UK Government thought it was coming out of an area of turbulence with all things EU related, the Europeans strike back.

Things were going splendidly: the European Union (Withdrawal Agreement) Bill had passed through the Commons with a “stonking” majority. Only the House of Lords to go and Brexit will be achieved by 31 January 2020.

Then the consequences of the Flybe affair hit the fan. Flybe is a British, regional airline and is in financial difficulty (again). The UK Government backed an emergency rescue plan which involved a tax break for the airline i.e. a temporary exemption from Air Passenger Duty.

Good old fashioned state interventionism? Yes, but legally problematic in today’s world of competitive markets. Lest we forget, the UK remains an EU member state until 31 January and, even then, the Johnson Government has committed itself to follow the organisation’s rules until December 2020.

Arguably, by backing Flybe’s rescue plan, the UK Government has given the company a form of State Aid (or subsidy). In terms of Article 107 of the Treaty on the Functioning of the European Union (TFEU) this is potentially unlawful. Such support is also a potential breach of Articles 101 and 102 of the Treaty (the competition provisions). The UK Government, of course, disputes these interpretations of its actions.

It’s not just other British airlines that will object to this support (British Airways has already done so), Michael O’Leary, CEO of Ireland’s Ryanair has entered the fray by declaring that he will launch a legal challenge. In essence, what the UK Government is doing is a distortion of the Single European Market; the intervention has more than just national ramifications.

Even the World Trade Organisation (of which the UK is a member) forbids the provision of State Aid in terms of its Agreement on Subsidies and Countervailing Measures.

There is a wider (and harder) lesson for the UK Government to learn: if it wants this country to have some sort of continued access to EU markets, it will have to play by EU rules. The UK, despite Prime Minister Johnson’s ongoing bluster, is the weaker party in the negotiations which will lead to a trade deal with the EU. It is very unlikely that the EU will allow the UK to gain a competitive advantage by ignoring the rules of the Single Market. Norway, which is not an EU member but which enjoys some access to European markets, could probably give the UK Prime Minister some sound advice on this matter:

https://ec.europa.eu/trade/policy/countries-and-regions/countries/norway/index_en.htm

https://www.politico.eu/article/norwegian-pm-uk-cannot-cherry-pick-eu-membership/

https://www.irishtimes.com/news/world/europe/brexit-explained-what-is-the-norway-model-and-is-it-an-option-for-the-uk-1.3712387

That said, Mr Johnson is not alone this morning in believing that EU rules can be ignored, his Chancellor Sajid Javid is telling UK businesses to expect increasing divergence or non-alignment:

http://news.sky.com/story/pm-to-give-brexit-day-speech-as-chancellor-tells-businesses-to-adjust-11911290

Ironically, taking back control (one of the Brexit campaign’s mantras) has never seemed so hollow. On 31 January 2020, be in no doubt, the UK will lose its status as a rule maker and become a rule taker.

Expect the European Commission to investigate the intervention by the UK Government and enforcement action for breach of EU rules in terms of Article 267 TFEU to follow. Welcome to Global Britain!

Links to the Flybe affair can be found below:

http://news.sky.com/story/flybe-disappointment-as-struggling-airline-scraps-newquay-to-heathrow-flights-11910413

https://news.sky.com/video/share-11910076

Copyright Seán J Crossan, 18 January 2020

No gun to the head

Photo by Max Kleinen on Unsplash

A contract will seldom be formed as a result of actual violence but threats of violence are more probable. Violence or the threat of violence must be of such a nature that they are enough to overwhelm a mind of ordinary firmness. Colloquially, one might say that there should be no literal gun placed to the head of another person in order to get them to enter a contract. Force and fear will have the effect of making the putative contract void. Threats to take legitimate legal action against someone do not fall into the category of force and fear.

I was reminded of this area of contract law today when reading a report of the activities of the Sicilian Mafia which is responsible for a €10 million agricultural fraud involving European Union subsidies. The Mafia has become particularly adept at creaming off these subsidies over many decades.

One of the features of the most recent fraud to be exposed is the time honoured Mafia practices of extortion and intimidation: law abiding Sicilian landowners are pressurised to sell their land to criminal enterprises which then go on to ‘milk’ the seemingly bottomless pit of EU subsidies. In the parlance of The Godfather, these law abiding citizens are made an offer they can’t refuse and, in the absence of effective law enforcement combined with the traditional weakness of the Italian State, what else are they supposed to do? It would take an extremely brave person (perhaps foolhardy) to stand up to such threats.

A link to the story about the activities of the Sicilian Mafia as reported in The Independent can be found below:

https://edition.independent.co.uk/editions/uk.co.independent.issue.160120/data/9285206/index.html

When introducing students to the law of contract, one of the first Scottish cases that I discuss with them is several hundred years old – Earl of Orkney v Vinfra (1606) Mor 16481.

It tends to stick in their minds – possibly – because of its particularly lurid details. I often say to the students that the story reads like something from either The Godfather Trilogy or The Sopranos TV series.

Andrew Vinfra was summoned to the Earl’s castle. He was presented with a deed (a formal document) by the Earl, the feudal overlord of the Islands, and he was ordered to sign it. The document was an agreement that Vinfra was to pay the Earl the sum of 2,000 Merks. Vinfra had no intention of agreeing to this proposition, whereupon the Earl started to curse and swear at him. The Earl then bluntly declared to Vinfra that he would drive his whinger (dagger or dirk) into Vinfra’s skull. The terrified Vinfra’s resolve completely crumbled at this point and he signed the document. He was wise to do so: the Earl had a notorious reputation for thuggery and violence. Murder was well within his capabilities.

Later, when at a safe distance from the Earl, Vinfra took steps to have the contract declared void on the grounds that he had signed the document because the Earl had used force and fear. The Earl attempted to pass off the incident as high jinks, but Vinfra was able to prove that his fear of being murdered was genuine. The court declared that the agreement was void: it had not been entered into voluntarily by Vinfra. It could not be enforced by the Earl against Vinfra. It was treated as if it had never existed.

The students, of course, love the drama of Vinfra’s ordeal and they naively scoff that this situation wouldn’t happen today …

My riposte to that attitude is to remind them that there are places not too far from Scotland where organised crime is a feature of daily life. The latest report of events from Sicily tends to bear this out.

Further reading about the Italian Mafia organisations and its ‘business’ activities can be found below:

  • Mafia Business: The Mafia Ethic and the Spirit of Capitalism by Pino Arlacchi (1986: Verso Books)
  • Cosa Nostra: A History of the Sicilian Mafia by John Dickie (Hodder: 2007)
  • Mafia Republic: Italy’s Criminal Curse. Cosa Nostra, ‘Ndrangheta and Camorra from 1946 to the Present by John Dickie (Sceptre: 2014)
  • The Sicilian Mafia: the Business of Private Protection by Diego Gambetta (Harvard University Press: 1996)
  • Gomorrah: Italy’s Other Mafia by Roberto Saviano (Picador Classic: 2012)

Copyright Seán J Crossan, 17 January 2020

Crown Court

Photo by NeONBRAND on Unsplash

More years have passed than I care to remember, but ITV would broadcast a television series called Crown Court made by Granada (one of the ITV companies). The programme was basically involved dramatic reconstructions of criminal trials which had taken place in the real Crown Court. It was very popular with viewers – as unsurprisingly these types of dramas tend to be – running for a total of 11 series (or seasons as our North American friends might say) from 1972 until 1984. 

I’m going to say that I’m far too young to remember the original broadcasts and it was the repeats that I saw during the school lunch break when I would be at my recently retired great aunt’s house. 

If readers are so minded, there is a link below to one of the episodes on the Youtube:

https://youtu.be/ALmzO-S1Klw

The reason why I’m recalling Crown Court is due to the fact that permission will soon be granted which will permit television cameras to be used in the real Crown Court in England and Wales. This is part of a push to increase public awareness of the criminal justice system in England and Wales.

The Crown Court (Broadcasting and Recording) Order 2020 will soon be ratified by the UK Government which will permit the limited broadcasting of certain proceedings – primarily sentencing statements of judges.

Please see a link below to a press release issued by the UK Government in this regard:

https://www.gov.uk/government/news/cameras-to-broadcast-from-the-crown-court-for-first-time

I did not know until today that it has been over 100 years since cameras were allowed into an English criminal court – the trial for murder of Doctor Harvey Hawley Crippen in 1910 at the Old Bailey in London (or the Central Criminal Court).

The Crown Court is the location for trials which proceed on indictment before a jury (or as we would say in Scotland, it is a court of solemn procedure). In some respects, this court is a hybrid of the Scottish Sheriff Court and the High Court of Justiciary. 

Overseas readers – those in North America particularly – will probably shake their heads in disbelief about this story. After all, both civil and criminal cases are regularly televised in that part of the world. What’s the fuss?

I must confess that I don’t really share the excitement about this development in the Crown Court. It’s not because I have any major objections to television broadcasts of trials – subject of course to safeguards being put in place for vulnerable witnesses and victims. As someone who principally deals with Scots Law, I just have a feeling of déjà vu. In Scotland, we have been here before and our English brethren, it seems, are left playing catch up.

Back in the 1990s, BBC Scotland made a ground-breaking television series called The Trial which consisted of 6 episodes looking at a particular aspect of Scottish criminal justice. Our library had a copy of the series and I would often show a particular episode – The Loan Path Murder – to my First Year law students. It was an excellent educational tool because it involved a real murder trial consisting of court-room footage (i.e. cross-examinations of the accused and the principal witnesses); and the defence and prosecuting counsel had an input (as well as the defence solicitor for the accused). The programme makers avoided sensationalism and the viewers got a realistic and measured insight into the world of Scots criminal law.

Over the last few decades, BBC Scotland has made further forays into the Scottish legal system (with varying success it has to be remarked). That said, in January 2020, the television station has just broadcast a programme called Murder Trial: The Disappearance of Margaret Fleming. Over two episodes. the background to a murder trial involving the disappearance of a vulnerable young woman is explored with contributions from Police Scotland, the Crown prosecutor, defence counsel and journalists who covered the story. All episodes are currently available on the BBC iPlayer. 

A link to the trailer for the programme can be found below:

https://www.bbc.co.uk/programmes/p07zn7jp

In any event, sentencing statements by Scottish judges in the High Court of Justiciary are regularly available on broadcast media and I often use this as learning resource for my students when trying to explain to them how the judges decide what sentence should be imposed on the now guilty party. 

Even the UK Supreme Court has permitted cameras and no doubt many members of the public were gripped by the prorogation of the UK Parliament proceedings at Guildhall, London in September 2019.

I do want to finish on a positive note: anything that demystifies the criminal law (and the legal system more generally) is to be welcomed. The court room is still to be regarded as a serious place and, if programme makers behave sensibly and sensitively, there is no reason why this should be undermined. When I arrange visits to the High Court of Justiciary for my students, from time to time, I do remind them that court is not about entertainment and one of the ground rules that we go over is no filming or taking photographs while they are on the premises. There are limits to some things.

Links to the story about the announcement that TV cameras are to be permitted into certain Court Court proceedings can be found below on the Sky News website:

http://news.sky.com/story/tv-cameras-to-be-allowed-to-film-high-profile-cases-in-crown-courts-within-months-11909503

http://news.sky.com/story/after-a-century-long-ban-cameras-capture-courtroom-drama-again-11909487

Copyright Seán J Crossan, 16 January 2020

Cash flows?

Photo by Didier Weemaels on Unsplash

Here, in the United Kingdom, the Brexit saga seems to be drawing to the end of stage 1 i.e. ratification of the withdrawal agreement that the EU and British Government of Boris Johnson have negotiated. The European Union (Withdrawal Agreement) Bill is likely to pass through the House of Lords this week or early next week.

Meanwhile in the rest of the EU, business seems to be going on fairly normally and, it was with some relief this week that I read about a forthcoming decision of the Court of Justice concerning the operation of the Single European Market – and not about Brexit.

The Republic of Hungary, a fellow EU member state – for the present time anyway, may be on course to lose this case which, at its heart, addresses the free movement of capital. Essentially, Hungarian law may well be incompatible with the operation of the Single European Market and, as well we know, EU Law enjoys primacy over domestic law:

  • Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1
  • Case 6/64 Costa v ENEL [1964] ECR 585, 593
  • HP Bulmer Ltd & Anor v J. Bollinger SA & Ors [1974] EWCA Civ 14
  • Case 148/78 Pubblico Ministero v Ratti (1979) ECR 1629
  • Defrenne v Sabena [1976] ECR 455, [1976] ICR 547, [1981] 1 All ER 122
  • C-106/77 Simmenthal [1978] ECR 629
  • C-106/89 Marleasing [1991] ECR I-7321

‘Stop Soros’

In 2017, Hungary passed a law which compelled non governmental organisations (NGOs) to declare their sources of funding to the Government (this information would then be available via a publicly accessible website). If a group received funding from a foreign individual or organisation above the value of 500,000 Hungarian Forints (or €1500 euros), this had to be made public. Furthermore, groups finding themselves in receipt of such funding had to declare themselves as ‘organisations in receipt of support from abroad’ on their websites and in their official communications.

The measure became popularly known in Hungary as the ‘Stop Soros’ Law – a reference to the antipathy of the Government of Hungary towards George Soros, the Hungarian-American billionaire. Soros is an energetic supporter of liberal social values which are often at complete odds with the right wing and ultra conservative views of the Hungarian Government.

A link to a story about the background to the Law can be found on the Reuters’ website below:

https://uk.reuters.com/article/uk-hungary-orban-ngos/civil-organisations-in-hungary-brace-for-government-crackdown-on-ngos-idUKKBN1HW1ZL

The Advocate General’s Opinion

Advocate General Campos Sánchez-Bordona has just issued an Opinion about the legality of Hungarian law in this respect. The controversial Hungarian Prime Minister, Viktor Orbán, has long been hostile to groups in civil society who are opposed to his Government’s aims and objectives and which receive funding from abroad.

According to the Advocate General, Hungarian law potentially breaches the free movement provisions of the Single European Market in relation to capital – as well as data protection, freedom of association and privacy rules contained in the European Charter of Fundamental Rights (see Case C-78/18 European Commission v Hungary).

A link to the Advocate General’s Opinion can be found below:

http://curia.europa.eu/juris/document/document.jsf?text=&docid=222223&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=15406

This Opinion is not the end of the matter because it is always worth remembering that the Court of Justice may not approve it when it makes its decision on the matter. As the Advocate General currently sees things, Hungarian law disproprotionately discriminates against those individuals and organisations who are not Hungarian. It is a barrier to the legitimate, free flow of capital across the borders of EU member states.

Project 1992

The Single Market (or Project 1992) came into existence on 1 January 1993. The Project saw the 12 member states of what was then the European Communities (the Coal and Steel Community, Euratom and the EEC collectively) implement ambitious plans to ensure frictionless trade. It was said that British businesses would find it as easy to sell goods or to provide services in Madrid as they presently were able to do so in Manchester.

The Single Market was based on 4 fundamental principles:

  • Free movement of persons
  • Free movement of goods
  • Free movement of services
  • Free movement of capital

Over the years, a huge amount of case law has built up around free movement of persons, goods and services, but it is rarer to see a decision of the Court of Justice regarding free movement of capital or money. Yet, free movement of capital is an essential corollary to the smooth operation of the Single Market.

How, for example, would consumers of goods and services in one member state pay for these if legitimate or honest money cannot flow back and forth across borders? Please note that I am not advocating the removal of all barriers to free movement – I am all too aware of the necessity to combat the money laundering activities of organised crime. Anyone who has read Misha Glenny’s excellent and terrifying book, McMafia: Seriously Organised Crime (2017: Vintage), will appreciate the real challenges that free movement of capital represents for law enforcement agencies across the EU.

Put simply, the 3 more prominent freedoms of the Single Market would grind to a halt if money was subject to all sorts of unrealistic barriers e.g. member states being able to impose very restrictive limits on the amount of money citizens could move in and out of the country. With the globalisation of financial services, many of us will either have forgotten these types of restrictions – or never experienced them.

When speaking to younger people, it often strikes me that many of them, who do travel regularly to Europe, have any real concept about things like tariff barriers, currency restrictions or passport controls. Brexit (and all its ramifications) may well be something of a wake -up call.

Admittedly, the original founding Treaty of the European Economic Community or the EEC (the Treaty of Rome) did envisage free movement of capital.

One of the first cases that I remember from my studies in EEC Law was Case 286/82 Luisi and Carbone v Ministero del Tesoro [1984] ECR -00377. At that time, Italy operated currency restrictions which meant that its citizens were limited to the amount of money that they could take out of the country. Luisi and Carbone were both fined by the authorities for taking more money out of the country than they were permitted under current domestic law. They argued that Italian law was in breach of the Treaty of Rome because it prevented them from going to another member state in order to receive services (and to pay for these). The Court of Justice was of the view that the restrictions imposed by Italy were unduly excessive.

Conclusion

In the 21st Century, we often forget that restrictions on movements of people, goods, services and capital were very common place. It is the direct influence of the European Single Market that consigned many of these barriers to trade to the status of historical curiosities.

Copyright Seán J Crossan, 15 January 2020