Equity and Trusts

Equity and Trusts The Court of Chancery, London, early 19th centuryEquity is a body of rules that developed in England separately from the "common law". The common law was administered by judges. The Lord Chancellor on the other hand, as the King's keeper of conscience, could overrule the judge made law if he thought it equitable to do so. This meant equity came to operate more through principles than rigid rules. For instance, whereas neither the common law nor civil law systems allow people to split the ownership from the control of one piece of property, equity allows this through an arrangement known as a 'trust'. 'Trustees' control property, whereas the 'beneficial' (or 'equitable') ownership of trust property is held by people known as 'beneficiaries'. Trustees owe duties to their beneficiaries to take good care of the entrusted property. In the early case of Keech v. Sandford a child had inherited the lease on a market in Romford, London. Mr Sandford was entrusted to look after this property until the child matured. But before then, the lease expired. The landlord had (apparently) told Mr Sandford that he did not want the child to have the renewed lease. Yet the landlord was happy (apparently) to give Mr Sandford the opportunity of the lease instead. Mr Sandford took it. When the child (now Mr Keech) grew up, he sued Mr Sandford for the profit that he had been making by getting the market's lease. Mr Sandford was meant to be trusted, but he put himself in a position of conflict of interest. The Lord Chancellor, Lord King, agreed and ordered Mr Sandford should disgorge his profits. He wrote,
"I very well see, if a trustee, on the refusal to renew, might have a lease to himself few trust-estates would be renewed… This may seem very hard, that the trustee is the only person of all mankind who might not have the lease; but it is very proper that the rule should be strictly pursued and not at all relaxed."
Of course, Lord King LC was worried that trustees might exploit opportunities to use trust property for themselves instead of looking after it. Business speculators using trusts had just recently caused a stock market crash. Strict duties for trustees made their way into company law and were applied to directors and chief executive officers. Another example of a trustee's duty might be to invest property wisely or sell it.[43] This is especially the case for pension funds, the most important form of trust, where investors are trustees for people's savings until retirement. But trusts can also be set up for charitable purposes, famous examples being the British Museum or the Rockefeller Foundation.
Further disciplinesLaw spreads far beyond the core subjects into virtually every area of life. Three categories are presented for convenience, though the subjects intertwine and flow into one another.
Law and society A trade union protest by UNISON while on strikeLabour law is the study of a tripartite industrial relationship between worker, employer and trade union. This involves collective bargaining regulation, and the right to strike. Individual employment law refers to workplace rights, such as health and safety or a minimum wage. Human rights, civil rights and human rights law are important fields to guarantee everyone basic freedoms and entitlements. These are laid down in codes such as the Universal Declaration of Human Rights, the European Convention on Human Rights and the U.S. Bill of Rights. Civil procedure and criminal procedure concern the rules that courts must follow as a trial and appeals proceed. Both concern a citizen's right to a fair trial or hearing. Evidence law involves which materials are admissible in courts for a case to be built. Immigration law and nationality law concern the rights of foreigners to live and work in a nation-state that is not their own and to acquire or lose citizenship. Both also involve the right of asylum and the problem of stateless individuals. Social security law refers to the rights people have to social insurance, such as jobseekers' allowances or housing benefits. Family law covers marriage and divorce proceedings, the rights of children and rights to property and money in the event of separation. Law and commerce The New York Stock Exchange trading floorCommercial law covers complex contract and property law. The law of agency, insurance law, bills of exchange, insolvency and bankruptcy law and sales law are all important, and trace back to the mediæval Lex Mercatoria. The UK Sale of Goods Acts and the US Uniform Commercial Code are examples of codified common law commercial principles. Company law sprung from the law of trusts, on the principle of separating ownership of property and control.[44] The law of the modern company began with the Joint Stock Companies Act, passed in the United Kingdom in 1865, which protected investors with limited liability and conferred separate legal personality. Intellectual property deals with patents, trademarks and copyrights. These are intangible assets: the right to protect your invention from imitation, your brand name from appropriation, or a song you wrote from performance and plagiarism. Restitution deals with the recovery of someone else's gain, rather than compensation for one's own loss. Unjust enrichment is law covering a right to retrieve property from someone that has profited unjustly at another's expense. Law and regulation The New York Stock Exchange trading floor after the Wall Street Crash of 1929, before tougher banking regulation was introducedTax law involves regulations that concern value added tax, corporate tax, income tax. Banking law and financial regulation set minimum standards on the amounts of capital banks must hold, and rules about best practice for investment. This is to insure against the risk of economic crises, such as the Wall Street Crash of 1929. Regulation deals with the provision of public services and utilities. Water law is one example. Especially since privatisation became popular, private companies doing the jobs previously controlled by government have been bound by social responsibilities. Energy, gas telecomms and water are regulated industries in most OECD countries. Competition law, known in the U.S. as antitrust law, is an evolving field that traces as far back as Roman decrees against price fixing and the English restraint of trade doctrine. Modern competition law derives from the U.S. anti-cartel and anti-monopoly statutes (the Sherman Act and Clayton Act) of the turn of the 20th century. It is used to control businesses who attempt to use their economic influence to distort market prices at the expense of consumer welfare. Consumer law could include anything from regulations on unfair contractual terms and clauses to directives on airline baggage insurance. Environmental law is increasingly important, especially in light of the Kyoto Protocol and the potential danger of climate change. Environmental protection also serves to penalise polluters within domestic legal systems.