Litigationey: Difference between revisions
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“Litigationey” often describes commercial undertakings predicated on some kind of “[[plausible deniability]]” — contractual arrangements which rather wish they were, or looked like, ''something else''. | “Litigationey” often describes commercial undertakings predicated on some kind of “[[plausible deniability]]” — contractual arrangements which rather wish they were, or looked like, ''something else''. | ||
For example, it is important to those who sell [[credit default swap]]s that they should not be mistaken for [[insurance contract]]s. | For example, it is important to those who sell [[credit default swap]]s that they should not be mistaken for [[insurance contract]]s. Dealers in [[equity swap]]s wish them to be not considered [[stamp duty|stampable]] investments in [[shares]]. Those who truck in collateral like to take it subject to [[pledge]] but, at the same time, be free to [[rehypothecation|give it away]]. | ||
These fictions are ''loosely'' based on true stories — they are well-''meant'' — but in their dramatic sweep they oblige practitioners to ''dissemble'' — to affect silly walks, use secret handshakes and invent elliptical ways of describing mundane things, all in the service of ''not uttering inconvenient realities''. | These fictions are ''loosely'' based on true stories — they are well-''meant'' — but in their dramatic sweep they oblige practitioners to ''dissemble'' — to affect silly walks, use secret handshakes and invent elliptical ways of describing mundane things, all in the service of ''not uttering inconvenient realities''. | ||
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Of course, the same circumlocution that foxes a taxman can bamboozle a judge. | Of course, the same circumlocution that foxes a taxman can bamboozle a judge. | ||
Thus, over time workaday documents become [[squabblative]] because, while the [[legal eagle|practitioners]] who propagate them are well-drilled, fluent in these language games and strongly incentivised to maintain the theatre, those who come to | Thus, over time workaday documents become [[squabblative]] because, while the [[legal eagle|practitioners]] who propagate them are well-drilled, fluent in these language games and strongly incentivised to maintain the theatre, those who come to them cold — who often hail from the foreign climes of [[Litigation|litigation department]], [[King’s Counsel|bar]] or [[King’s Bench Division|bench]] — are not. | ||
We have remarked before about the differing [[purpose|functions]] a [[contract]] has during its life. [[Sales]], [[ | We have remarked before about the differing [[purpose|functions]] a [[contract]] has during its life. [[Sales]], [[operations]], [[legal]] and [[trading]] — each has its own priorities and private agenda. When a commercial accord reaches cataclysm, these newly inducted agents from the disputes tribunals find a different [[purpose]] again: to wreak havoc. If given the chance, they deny utterly the tacit accommodations their commercial cousins made to each other in fair times, when the goal of reaching compliant, tax efficient consensus was mutual. A “litigationey” contract gives just such a chance. | ||
Herewith the great bane of hindsight: how we are goaded to forget. But litigation advisers don’t need goading: they never knew in the first place. Why we should commend | Herewith the great bane of hindsight: how we are goaded to forget. But litigation advisers don’t need goading: they never knew in the first place. Why we should ever commend our commercial souls to the hands of those who sit upon the King’s Bench is a question best not pondered. | ||
ISDAs come before the courts one at a time. They are exotic specimens, rather like those ghost orchids: retrieved at personal cost from the depths of a sweaty tropical swamp and prone to cause hallucinations. | ISDAs come before the courts one at a time. They are exotic specimens, rather like those ghost orchids: retrieved at personal cost from the depths of a sweaty tropical swamp and prone to cause hallucinations among people not ready for them. Such as High Court judges. | ||
Litigation about them is fraught: Rarely do those who argue these cases have any practical sense of what they are or how they work; those adjudicating them certainly don’t.<ref>{{Casenote|Marine Trade|Pioneer}} is a great example. The outcome — fortunately now overruled — is just patently absurd to anyone who has spend a week in the derivatives business.</ref> | Litigation about them is fraught: Rarely do those who argue these cases have any practical sense of what they are or how they work; those adjudicating them certainly don’t.<ref>{{Casenote|Marine Trade|Pioneer}} is a great example. The outcome — fortunately now overruled — is just patently absurd to anyone who has spend a week in the derivatives business.</ref> | ||
And here {{icds}}’s vernacular plays into the hands of caprice and obstrepereity. That [[Squadsman|squaddish]] left-handedness ''cries out'' to be misunderstood. | And here {{icds}}’s vernacular plays into the hands of caprice and obstrepereity. That [[Squadsman|squaddish]] left-handedness ''cries out'' to be misunderstood. To ask a non-specialist parse a [[flawed asset]] clause,<ref>{{casenote|Metavante|Lehman}}</ref> an {{cddprov|Event Determination Date}}, or even the {{isdaprov|Notices}} provisions of an {{isdama}}<ref>{{casenote|Greenclose|National Westminster Bank plc}}</ref> is to pave the road to confounded disappointment. | ||
There are some cases where the confusion goes deeper: the [[Jolly Contrarian|JC]] contends that [[credit default swap]]s are an intrinsically ambiguous way to address a straightforward problem | There are some cases where the confusion goes deeper: the [[Jolly Contrarian|JC]] contends that [[credit default swap]]s are an intrinsically ambiguous way to address a straightforward problem, as such, are bound to create fear and loathing, and have routinely done this over the thirty years we have known them. | ||
It all adds to the JC’s mounting, great conspiracy theory that the whole the financial services industry, and perhaps even commerce itself, is really a perpetual motion machine devised by the various guilds of professional advisers for the sole purpose of [[Rent-seeking|extracting rent]] from it. | |||
{{sa}} | {{sa}} | ||
*[[Plausible deniability]] | *[[Plausible deniability]] | ||
Revision as of 16:10, 24 May 2023
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Litigationey
/ˌlɪtɪˈɡeɪʃᵊni/
(Also suish, squabblative (adj.)
Of a commercial issue, important, basically straightforward but, thanks to the sedimentary interventions of generations of professional advisers over the ages, rendered in language so opaque that no-one outside an inner cabal of specialists knows what is really going on. And that inner cabal sure ain’t talking.
“Litigationey” often describes commercial undertakings predicated on some kind of “plausible deniability” — contractual arrangements which rather wish they were, or looked like, something else.
For example, it is important to those who sell credit default swaps that they should not be mistaken for insurance contracts. Dealers in equity swaps wish them to be not considered stampable investments in shares. Those who truck in collateral like to take it subject to pledge but, at the same time, be free to give it away.
These fictions are loosely based on true stories — they are well-meant — but in their dramatic sweep they oblige practitioners to dissemble — to affect silly walks, use secret handshakes and invent elliptical ways of describing mundane things, all in the service of not uttering inconvenient realities.
Of course, the same circumlocution that foxes a taxman can bamboozle a judge.
Thus, over time workaday documents become squabblative because, while the practitioners who propagate them are well-drilled, fluent in these language games and strongly incentivised to maintain the theatre, those who come to them cold — who often hail from the foreign climes of litigation department, bar or bench — are not.
We have remarked before about the differing functions a contract has during its life. Sales, operations, legal and trading — each has its own priorities and private agenda. When a commercial accord reaches cataclysm, these newly inducted agents from the disputes tribunals find a different purpose again: to wreak havoc. If given the chance, they deny utterly the tacit accommodations their commercial cousins made to each other in fair times, when the goal of reaching compliant, tax efficient consensus was mutual. A “litigationey” contract gives just such a chance.
Herewith the great bane of hindsight: how we are goaded to forget. But litigation advisers don’t need goading: they never knew in the first place. Why we should ever commend our commercial souls to the hands of those who sit upon the King’s Bench is a question best not pondered.
ISDAs come before the courts one at a time. They are exotic specimens, rather like those ghost orchids: retrieved at personal cost from the depths of a sweaty tropical swamp and prone to cause hallucinations among people not ready for them. Such as High Court judges.
Litigation about them is fraught: Rarely do those who argue these cases have any practical sense of what they are or how they work; those adjudicating them certainly don’t.[1]
And here ISDA’s crack drafting squad™’s vernacular plays into the hands of caprice and obstrepereity. That squaddish left-handedness cries out to be misunderstood. To ask a non-specialist parse a flawed asset clause,[2] an Event Determination Date, or even the Notices provisions of an ISDA Master Agreement[3] is to pave the road to confounded disappointment.
There are some cases where the confusion goes deeper: the JC contends that credit default swaps are an intrinsically ambiguous way to address a straightforward problem, as such, are bound to create fear and loathing, and have routinely done this over the thirty years we have known them.
It all adds to the JC’s mounting, great conspiracy theory that the whole the financial services industry, and perhaps even commerce itself, is really a perpetual motion machine devised by the various guilds of professional advisers for the sole purpose of extracting rent from it.
See also
- Plausible deniability
- Litigation department
- Writing for a judge
- Equity v credit derivatives showdown
- Purpose
References
- ↑ Marine Trade v Pioneer is a great example. The outcome — fortunately now overruled — is just patently absurd to anyone who has spend a week in the derivatives business.
- ↑ Metavante v Lehman
- ↑ Greenclose v National Westminster Bank plc