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. Those who deal in [[equity swap]]s don’t with them to be considered [[stamp duty|stampable]] investments in [[shares]]. Those who truck in collateral like to take things subject to [[pledge]] but at the same time [[rehypothecation|give it away]].  
For example, it is important to those who sell [[credit default swap]]s that they should not be mistaken for [[insurance contract]]s. Those who deal 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''. Of course, the same circumlocution that placates a taxman can bamboozle a judge.
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 documents become [[squabblative]] because, while the [[legal eagle|practitioners]] who propagate them are well-drilled, fluent and strongly incentivised to maintain their theatre, those who come to regard them in the [[Litigation|litigation department]], at the [[King’s Counsel|bar]] and [[King’s Bench Division|on the bench]] are not.
Of course, the same circumlocution that foxes a taxman can bamboozle a judge.


We have remarked [[Purpose|before]] about the differing [[purpose|functions]] a [[contract]] has during its lifecycle, for sales, operations and trading departments. When a commercial accord reaches cataclysm, the parties find a different purpose again: to deny utterly the tacit accommodations they made each other in fair times when the goal of reaching compliant and tax efficient consensus was mutual.  
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 the cold — who hail from foreign climes of the [[Litigation|litigation department]], the [[King’s Counsel|bar]] and [[King’s Bench Division| the bench]] are not.


This is the great disadvantage of hindsight: how we are goaded to forget. But litigation advisers don’t have even that much incentive, and none of the practical experience.
We have remarked before about the differing [[purpose|functions]] a [[contract]] has during its life. [[Sales]], [[operation]]s, [[legal]] and [[trading]] each has its own priorities and private agenda. When a commercial accord reaches cataclysm, these newly inducted agents find a different [[purpose]] again: to wreak havoc. If given the chance they deny utterly the tacit accommodations their commercial cousins made each other in fair times when the goal of reaching compliant and tax efficient consensus was mutual. A “litigationey” contract gives just such a chance.  


ISDAs come before the courts one at a time. They are exotic specimens, rather like those ghost orchids retrieved from the sweaty depths of a tropical swamp that are prone to cause hallucinations. Litigation about them is fraught: it is usually obvious that no-one conducting arguments has much of a sense of what they are or how they work; those adjudicating 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>
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 ever 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.  
 
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. Just try asking 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>  
And here {{icds}}’s vernacular plays into the hands of caprice and obstrepereity. That [[Squadsman|squaddish]] left-handedness ''cries out'' to be misunderstood. Just try asking 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>