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We live in a world increasingly comprised of what Lorraine Daston[1] would call “thin” rules — specific, formalistic, algorithmic micro-rules designed for literal and measurable compliance. Contrast these with “thick rules”, which are generalised principles requiring comprehension, judgment and balance. “avoid conflicts of interest”. “Treat your customers fairly”.
It is part of JC’s ongoing mantra that as we surrender ourselves to the deterministic dogma of scale wherein we can and should be managed by algorithm — where we trust the deterministic predictability of algorithms and distrust the ineffable, unjudgeable metis and human experience — not measurably “fair” in the sense of even and predictable — we lose something very important.
Anyhow.
The problem is that thick rules do not reduce themselves conveniently into thin rules, as our literature never tires of reminding us: this is the essential moral of any story in the “be careful what you wish for” genre: Aladdin and his lamp, the sorcerer’s apprentice; anything in which the protagonist takes a lazy shortcut to achieve a comfortable end.
While they are meant to be deterministic and clear, the practical thin rules will inevitably be dispersed across various sources: legislation, promulgated regulations, previously decided cases, public guidance, common law principles, and analogy to the European regulation from which the rule was originally derived and in some case woodenly translated.
Now, nowhere is more beset with thin fiddly rules than the financial services industry. The JC has a theory that the financial services industry has evolved as a means of interpreting rules, and not vice versa. There is some irony that those who make the rules are generally not prepared to say what they mean, so if one wants to know, one must seek the, well metis, of one who holds themselves out as an expert and who is, for a fee, prepared to say. A lawyer. Having a kind solicitor sort all that out and some it up in a memo is a price worth paying!
Now, no thoughtful client brings such a question to a lawyer without also having in mind a preferred answer to it. Something along the lines of “it is fine for me to do/not do this,” depending on the commercial implication.
The client may not be realistic in that aspiration. An in-house lawyer may know perfectly well it is a fruitless exercise but will do it to get her salesperson off her back. This is a poor use of legal counsel, but we should not fool ourselves it does not happen. But most of the time there is room for doubt.
For good commercial lawyer, there are obvious rules of engagement here — but the world is beset with poor commercial lawyers.
The first is this: bear your client’s desired outcome in mind. If you do not know it, ask.
The proposition is usually:
“I wish to be able do Y. There is a new Regulation X on the topic of Y. To our mind, Regulation X is ambiguous. It could be interpreted to mean A or B. If it is A, then we can do Y. If it is B, then we cannot. What is your advice about Regulation X? Can we do Y?”