COURT BANKING, M’LORD: ‘Unworkable’ register of judicial interests reveals top judges’ financial links to world of big money, insurance giants, vested interests & banks fined billions in plea deals with financial regulators

Register reveals judicial links to bank cartels & rate rigging. A REGISTER of judicial interests – described by Scotland’s former Lord President Lord Brian Gill & First Minister Nicola Sturgeon as being “unworkable” – has revealed financial links between some of Scotland’s top judges & banks fined by regulators for rigging international exchange rates, failure to report to regulators, and operating in cartels like “the mafia”.

The documents, released by the Scottish Courts & Tribunals Service in response to a Freedom of Information request – reveal the latest lists of shareholdings & interests of Scotland’s top judges - who are fighting to prevent the public from scrutinising their hidden wealth.

Also disclosed for the first time are the shareholdings of non judicial members who sit on the Scottish Courts Service Board (SCSB) – now renamed as the Scottish Courts & Tribunals Service Board (SCTSB) – the influential body which makes decisions on how the courts operate.

Among those who now feature in the register of interests for top judges who decide on court administration are new faces to the SCTS Board, including Lady Anne Smith – who was appointed head of the Tribunals by former top judge Lord Brian Gill.

The substantial declarations of shareholdings reveal judicial links to financial institutions such as JP Morgan – fined over foreign exchange & Libor rate rigging, Goldman Sachs – fined for reporting violations by US authorities & Barclays – who were fined a record £284.4 million by British regulators and around £1.5bn in total as part of a UK and US settlement with authorities over the foreign exchange trading scandal.

MSPs on the Scottish Parliament’s Public Petitions Committee are currently investigating a plan to create a register of judicial interests as called for in Petition PE1458: Register of Interests for members of Scotland's judiciary. 

If the judicial transparency proposal becomes reality, all members of Scotland’s judiciary - instead of just the elite few who sit on the board of the Scottish Courts - will be required to declare their vast and varied interests from membership of charities to undeclared paid work, property ownership, financial wealth and connections to big business & the legal profession among a host of details many in public life are already required to enter in declarations of interests.

JUDICIAL DECLARATIONS: ‘Unworkable’ register is very workable … and very revealing:

President of Scottish Tribunals - Rt Hon Lady Smith: Shareholdings: Artemis Fund Managers, Barclays, Blackrock AM, Brown Advisory, Goldman Sachs, Global Access, Henderson Investment, Ishares PLC, JP Morgan, Lazard Fund Managers, Pimco Global, Skandia Investment, Vanguard Funds PLC.

Lord Justice Clerk Lord Carloway: None, Sheriff Principal Duncan L Murray: None, Sheriff A Grant McCulloch: None significant, Dr Joseph Morrow: None

Sheriff Iona McDonald:  Glaxosmithkline, Royal Dutch Shell, Unilever, Equiniti, Barclays, Standard Life, HBOS, Royal Mail.

Johan Findlay OBE JP:  Aviva, Vodaphone, Santander, Unilever, Norwich Union, Legal & General, Fidelity Funds Network, Lloyds Banking Group, Thus Group, HBOS, Trafficmaster, Standard Life.

Eric McQueen: None, Dr Kirsty J Hood: None, Professor R Hugh MacDougall: None

Simon J D Catto: Aberdeen Football Club PLC, Scottish Power UK Plc, Royal Mail PLB.

Joe Al-Gharabally: RBS, Ryan Air, Aviva, AT&T.

Anthony McGrath: Accys Technology, Alexander Mining, Apple, Ashley House, Asian Citrus, Augean, Avanti Comms, Barclays Bank Bond, Billings Services, Camkids, Cell Therapeutics, Centamin, Chariot Oil, Chemring, Coal Of Africa, Consolidated General Minerals, Correro, Cupid, East West Resources, Emblaze, Essenden, e-Trade Financial, Fox Marble, Globo plc, Goldenport Holdings, Goldplat, Heritage Oil, HSBC Holdings, lmic, Infrastrata, Interpublic, Jubilee Platinum, Lloyds Banking, Magnolia Petroleum, Mobile Streams, Norseman Gold, Polo Resources, Pure Bioscience, Quindell, Reach4entertainment, Resource Holdings, Royal Bank of Scotland, Saltire Taverns, Stagecoach, Standard Charter, STV, Tanfield, Tower resources, Volga Gas, Westminster Group.

And, in further documents released by the Scottish Courts & Tribunals Service - the last snapshot of the Scottish Court Service Board (SCSB), reveals the final declaration of interests, directorships & shareholdings of Scotland’s now retired top judge Lord Brian Gill – who bitterly fought proposals to increase judicial transparency by creating a register of judicial interests.

SCSB Interests 2015. Lord President - Rt Hon Lord Gill: Director of Scottish Redundant Churches Trust, a company limited by guarantee registered in Scotland (SC162884). President of the Royal Society for Home Relief to Incurable, Edinburgh Trustee of the Columba Trust: a trust for the benefit of the Roman Catholic Church in Scotland, Vice President of the Royal Conservatoire of Scotland,Trustee of the Royal School of Church Music, a registered charity for the promotion of church music in the Christian Churches (Reg No 312828) Chairman of Council, Royal School of Church Music, Trustee of the Royal Conservatoire of Scotland Endowment Trust: a trust for the benefit of RCS and its students, Trustee of the Royal Conservatoire of Scotland Trust: a trust for the benefit of the RCS and its students, Director of the Royal School of Church Music, a company limited by guarantee registered in England (Reg'd No 250031)

Shareholdings: Henderson UK Growth Fund Retail Class Acc, Aviva Investors UK Equity Fund, Newton Global Equity Fund, Scottish Widows UK Growth Sub-Fund, HSBC Balanced Fund (Retail Acc), Royal Mail Plc,TSB Group Plc, Urban and Civil Plc, Vestry Court Ltd.

Hon Lord Bannatyne: Chester Street (Limited Partner) Ltd on behalf of the Board if the Cathedral Church of St Mary the Virgin, Palmerston Place, Edinburgh Member of the Board of the Cathedral Church of St Mary the Virgin, Palmerston Place, Edinburgh Shareholder as Trustee for the Cathedral Church of St Mary the Virgin, Palmerston Place, Edinburgh, in Chester Street (General Partner) Ltd Member of the Clergy Disciplinary Tribunal of the Episcopal Church, Member of the Clergy Disciplinary Tribunal of the Episcopal Church.

Shareholdings: Dimensional Emerging Mkts Core Equity, Dimensional Global Short Date Bond, Dimensional Global Targeted Value, Dimensional UK Small Companies, Dimensional UK Value, Ishares FTSE EPRA UK Prop, L&G All Stocks Gilt Index, L&G All Stocks IL Gilt Index, L&G UK Index I, Vanguard FTSE D World ex-UK Equity Index.

Sheriff Principal R Alastair Dunlop QC: Chair of Local Criminal Justice Boards in Tayside Central and Fife,Commissioner of Northern Lighthouses, Elder of Gorebridge Parish Church of Scotland, Member of Royal Northern & Clyde Yacht Club, Member of the New Club, Edinburgh, Trustee of St John's Kirk of Perth Trust.

Shareholdings: Astrazeneca, BHP Billiton, Blackrock AM UK Gold & General, Bluescope Steel, BNY Mellon Newton Global, Carador Income Fund, CG Real Return Inc, Diageo, Findlay Park FDS American Smaller Cos, Intercontinental Hotels, Lomond Shipping Co, Lloyds Bank, M&G (Guernsey) Global Leaders, National Grid, Oakley Capital Investments, Pernod Ricard, Real Estate Credit Investors, Rio Tinto, Royal Bank of Scotland, Royal Dutch Shell, Scottish Oriental Smaller Cos, Tesco, Verizon Communications, Vodafone, Weir Group.

INTERESTS FOR REGISTER:

The proposal to require all members of the judiciary to declare their interests gained cross party support from msps during a debate on the petition - held at the Scottish Parliament on 7 October 2014, and reported along with video footage and the official record, here: Debating the Judges. MSPs overwhelmingly supported a motion urging the Scottish Government to create a register of judicial interests.

However, in an unprecedented intervention by First Minister Nicola Sturgeon on behalf of the wealthy secretive elite judiciary who head Scotland’s courts, Ms Sturgeon attacked the idea of judicial transparency and plans to create a register of interest for judges.

The First Minister – herself a former solicitor - joined the now retired Lord President Lord Brian Gill in accusations of aggressive media & litigants – in an attempt to block the judicial transparency proposal. The First Minister also quoted the 73 year old former judge, backing his claim such a register – which revealed Gill’s own substantial interests – is “unworkable” and cannot possibly be applied to the entire judiciary.

The First Minister claimed in a letter to the Petitions Committee: The breadth of such a register would make it virtually unworkable. It would need to cover not only financial interests, but also memberships of groups and associations and familial and social relationships. Even so, such a register might not capture relevant issues that could arise.”

Ms Sturgeon continued: “The position of the judiciary is different from that of MSPs and others who hold public office. The judiciary cannot publicly defend themselves. The Lord President has cautioned that such a register could also have unintended consequences. Consideration requires to be given to judges' privacy and freedom from harassment by aggressive media or hostile individuals, including dissatisfied litigants. In addition, there is currently no evidence that judges who should have recused themselves from cases have not done so.”

Aside from legal vested interests ‘aggressive’ opposition to the judicial transparency plan, the proposal to require judges to declare their interests has powerful backing from judicial watchdogs.

Scotland’s first ever Judicial Complaints Reviewer (JCR) - Moi Ali supported the judicial transparency proposal during an evidence session held at Holyrood in September 2013.

In a letter to the Public Petitions Committee, Ms Ali told MSPs: The position of the judiciary is incredibly powerful. They have the power to take away people’s assets, to separate families, to lock people away for years. Some of these people will not have committed a crime. They may be women who want protection from abusing partners, fathers who want access to their children, or people whose home is at stake due to various legal or family wrangles. People going through the court system face stress and anxiety, perhaps financial pressures, and fear about the future. Their perspective is important and must be a consideration in this matter.

Ms Ali continued: “Given the position of power held by the judiciary, it is essential not only that they have absolute integrity but crucially, that they are seen to have absolute integrity. Again, a register of interests is a way of demonstrating that a judicial office holder is impartial and has no vested interest in a case –financially, through family connections, club/society membership or in any other way. Conversely, the refusal to institute a register of interests creates suspicion that in turn undermines judicial credibility. So once more, a register of interests is good for the judiciary and good for the public.”

Current JCR Gillian Thompson OBE gave further support for the plan to create a register of interests for judges during an evidence session at Holyrood in June 2015.

Multiple property ownership and interests in real estate, buy to let and property companies is big business for members of the judiciary and their family members – however there are no details or disclosures of any property directly owed by the SCS Board members contained in the declarations released by the SCS.

Additionally, the limited disclosures of SCS Board & SCTSB contain no references to outside earnings & work, relationships to law firms, big business and others more detailed declarations which may be picked up by a fully published register of judicial interests as is currently under investigation by the Scottish Parliament’s Public Petitions Committee.

Previous articles on the lack of transparency within Scotland’s judiciary, investigations by Diary of Injustice including reports from the media, and video footage of debates at the Scottish Parliament’s Public Petitions Committee can be found here : A Register of Interests for Scotland's Judiciary

JUDICIAL CAPITAL: Court clash over £400m Heather Capital collapse reveals suspended judge received £200K from Gibraltar law firm involved in £28.4m offshore cash transfers

Court hears Sheriff received £200K from law firm. DETAILS of a £200,000 payment made to a suspended Scottish judge have emerged in a court clash between liquidators of the collapsed £400m Heather Capital Hedge Fund & Glasgow based law firm Levy & Mcrae – who are being sued for £28.4million in relation to transfers of cash to offshore companies.

In an opinion issued by Lord Woolman at the Court of Session, it was revealed suspended Sheriff Peter Black Watson (61) – a former partner in Levy & McRae - received £200,000 from the client account of Hassans – a Gibraltar based law firm on 23 December 2008.

The payment to the suspended Sheriff came to light in court documents which also revealed a trail of cash transfers from Levy & Mcrae to offshore companies based in Panama, Monaco & Gibraltar.

The court also heard Gibraltar based Hassans- acted in the transfer of funds to companies incorporated in Gibraltar that were owned or controlled by Gregory King – who launched Heather Capital in 2004.

Details from the court opinion further revealed “One of the transactions concerned a company called Westernbrook Properties Limited. On 4 January 2007 the sum of £19 million was paid into the first defender’s client account. It was paid out 5 days later to an account with HSBC Private Bank in Monaco held by a Panamanian company. On 24 January the sum of £9.412 million was paid into the first defender’s client account. It was paid out on 28 March to the client account of Hassans.”

Liquidators of the now defunct hedge fund contend Heather Capital was defrauded of a sum of about £90 million. The court also heard claims Levy & McRae provided "dishonest assistance" to Heather Capital’s founder - Gregory King – now based in Spain.

Paul Duffy of Ernst & Young – who are handling Heather Capital’s affairs - is demanding  £28.4million from Levy & McRae, Mr Watson and other partners of the firm

During the hearing, legal agents acting for the liquidators also sought to obtain an order requiring suspended Sheriff Watson to disclose his involvement with Heather Capital.

However, Lord Woolman refused the request, expressing fears that granting the order would ‘encourage litigation’.

Lord Woolman said in his opinion: "I decline to do so. The details of insurance are a private matter between the insured and insurers. There are major questions involved in disclosure, including the likelihood that it would encourage speculative 'deep pocket' litigation."

Since 2010, Ernst & Young have been battling to recover investors cash from the demise of Heather Capital.

In court documents filed in the Isle of Man as part of a negligence claim against accountants KPMG over their role in Heather Capital - it is claimed Heather Capital were operating a Ponzi scheme to dupe investors.

Documents allege that as early as 2006, senior KPMG staff feared Heather Capital “may have been perpetrating a fraud”.

And in August 2007, KPMG employee Raymond Gawne told a colleague that he was “very uncomfortable" acting for the fund which “may have acted in a criminal manner".

The claim also alleges that millions of pounds of loans passed through the client account of Glasgow lawyer Frank Cannon who acted for Heather.

KPMG senior executive David McGarry sent an email to Gregory King stating: “Frank Cannon has been uncooperative, either in providing some form of explanation for all of the security documentation prepared by his firm, or in agreeing to facilitate access to Cannon’s clients’ money account".

In July 2011, the Scottish Crime & Drug Enforcement Agency obtained search warrants to recover material from the Glasgow based Cannon Law Practice – run by Frank Cannon - as part of an investigation into the alleged embezzlement of millions of pounds of cash. Much of the allegedly stolen money passed through Cannon's client account.

The move by Police followed a financial audit of Cannon’s Law Practice - conducted by the Law Society of Scotland in 2010, during which it was discovered millions of pounds had passed through Cannon’s client account in relation to a series of offshore transactions involving their client - Gregory King, a director of Mathon Ltd & Heather Capital.

It is unknown at this time if the Law Society of Scotland have conducted any financial audit of law firms mentioned in the latest court proceedings – where it is alleged tens of millions of pounds have passed through client accounts to offshore companies.

A report from Police Scotland naming Gregory King, Andrew Sobolewski, Andrew Millar & Scott Carmichael is still being considered by the Lord Advocate Frank Mulholland & Scotland’s Crown Office. However, no decision has yet been made public on the case since the Crown Office confirmed it was considering Police reports filed with prosecutors some time during 2014.

SHERIFF, SUSPENDED:

Peter Black Watson (61) – a partner in Levy & Mcrae at the time of the transactions - was suspended from judicial position of Sheriff by Scotland’s top judge Lord Brian Gill earlier this year - after an investigation by the Scottish Sun newspaper prompted the Lord President to demand sight of a multi million pound writ against Glasgow law firm Levy & Mcrae.

As no register of interests for members of Scotland's judiciary currently exists, top judge Lord Gill was unaware of Sheriff Watson’s involvement in Heather Capital until the Scottish Sun newspaper contacted the Judicial Office directly.

Watson offered to temporarily step aside from his judicial duties – while the litigation concluded – however a spokesperson for the Judicial Office told the media: “The Lord President concluded that in the circumstances a voluntary de-rostering was not appropriate and that suspension was necessary in order to maintain public confidence in the judiciary.”

A statement from the Judicial Office for Scotland read: Sheriff Peter Watson was suspended from the office of part-time sheriff on 16 February 2015, in terms of section 34 of the Judiciary and Courts (Scotland) Act 2008.

“On Friday 13 February the Judicial Office was made aware of the existence of a summons containing certain allegations against a number of individuals including part-time sheriff Peter Watson.

The Lord President’s Private Office immediately contacted Mr Watson and he offered not to sit as a part-time sheriff on a voluntary basis, pending the outcome of those proceedings. Mr Watson e-mailed a copy of the summons to the Lord President’s Private Office on Saturday 14 February.

On Monday 16 February the Lord President considered the matter. Having been shown the summons, the Lord President concluded that in the circumstances a voluntary de-rostering was not appropriate and that suspension was necessary in order to maintain public confidence in the judiciary. Mr Watson was therefore duly suspended from office on Monday 16 February 2015.”

Watson – who remains suspended from the judicial bench, was a director of Mathon Ltd - a key part of the Heather empire. The suspended Sheriff who now works out of PBW Law, also held shares in Aarkad PLC - a company based in the Isle of Man which channelled money into Heather Capital.

Watson was also a director of a “King & Company” – a Private Bank set up by Gregory King in Gibraltar. However, Gibraltar’s Financial Services watchdog revealed the banking license application for “King & Company” was withdrawn after two years in 2010.

In his capacity as a solicitor, and during the time Watson acted as a Sheriff – his clients included former First Minister Alex Salmond, former Rangers owners Sir David Murray, ex-Glasgow City Council leader Stephen Purcell and former Lord Advocate Elish Angiolini.

The full opinion from Lord Woolman in the latest round of litigation in the Heather Capital case at Scotland’s Court of Session:

OUTER HOUSE, COURT OF SESSION [2015] CSOH 115: CA207/14

NOTE BY LORD WOOLMAN

In the cause

HEATHER CAPITAL LIMITED (IN LIQUIDATION) Pursuers; against

LEVY & McRAE AND OTHERS Defenders:

Pursuer:  Lord Davidson of Glen Clova QC;  Shepherd & Wedderburn LLP
Defenders:  Clark QC, J Brown;  Simpson & Marwick
14 August 2015

Introduction

[1]        Heather Capital Ltd (‘HC’) was incorporated in the Isle of Man in 2005.  Prior to its liquidation in 2010 it had received investments exceeding $400 million. The present action has been raised in its name by the liquidator. The first defender is the firm of Levy & McRae. The other defenders are eight individuals, who were partners in the firm in the period from 1 January 2007 to 31 December 2008.

[2]        The liquidator contends that the company was defrauded of a sum of about £90 million. The scheme involved the transfer of funds to companies incorporated in Gibraltar that were owned or controlled by one of HC’s directors, Gregory King.  A firm of solicitors in Gibraltar, Hassans, acted in these transactions.

[3]        According to the liquidator, in early 2007 HC’s auditors raised queries about these transactions.  Subsequently, Mr King sought to conceal their true nature.

[4]        One of the transactions concerned a company called Westernbrook Properties Limited. On 4 January 2007 the sum of £19 million was paid into the first defender’s client account.  It was paid out 5 days later to an account with HSBC Private Bank in Monaco held by a Panamanian company.  On 24 January the sum of £9.412 million was paid into the first defender’s client account.  It was paid out on 28 March to the client account of Hassans.

[5]        On 23 December 2008 a payment of £200,000 was made to the eighth defender, Mr Peter Watson, from Hassans’ client account.

[6]        The liquidator pleads that HC was the client of the first defender at the material time. Accordingly, the defenders owed HC certain fiduciary duties, together with an obligation to exercise the knowledge, skill and care of reasonably competent solicitors.

[7]        It is also important to notice the terms of the pursuer’s ninth plea-in-law. It states:

“the pursuer having suffered loss, injury and damage by reasons of the defenders’ dishonest assistance of Gregory King in the latter committing breach of his fiduciary duties owed to the pursuer … decree should be pronounced”

[8]        The liquidator seeks to recover the sum of £28.4 million from the defenders. He intimated the claim on 23 June 2013.  There followed extensive pre-action correspondence before the summons was served on 23 October 2014. During that period, the liquidator did not request clarification of the membership or constitution of the firm of Levy & McRae as it existed from time to time.

[9]        The summons called on 10 February 2015.  The defences were lodged a week later. They stated that three of the defenders had been wrongly convened, because they had been assumed as partners after June 2007.  They are Mr Alasdair Gillies (1 July 2007), Mr Andrew Sleigh (1 December 2008), and Mr Gary Booth (1 January 2011).

[10]      The defenders raised this matter at the preliminary hearing on 5 March, and the continued hearing on 8 May. They said it involved significant reputational damage to those three individuals. They asked for early disposal of this discrete issue.

[11]      I fixed a hearing to take place on 13 August.  About a week before the hearing, the liquidator enrolled a motion to allow a minute of amendment.  It sought to add five further individuals as defenders, on the footing that they had been partners in the first defender in the period from 4 January 2007 to date.

[12]      The liquidator gave the following reasons in support of his motion:

“The pursuer’s agents wrote to the agent for the defenders on 7 May 2015 and 7 July 2015. In those letters, the pursuer’s agent requested:

    confirmation that the defenders had adequate insurance cover in place to meet the pursuer’s claim if it was successful;
    copies of the partnership agreements for each defender that the defender’s agents maintain have been wrongly convened; and
    details of each defender’s capital contribution to the firm

The defenders have failed to provide any of this information to the pursuer. The pursuer has identified a further 5 current and former partners of the firm who require to be convened.

Without confirmation that the defenders have sufficient insurance cover, or evidence as to why the defenders do not incur personal liability (which depends on the circumstances of each case), the pursuer seeks to convene these partners and former partners to the action as they may be jointly and severally liable for the debts of the firm.” (emphasis added)

Liability of new partners

[13]      The liability of new partners is governed by section 17(1) of the Partnership Act 1890:

“A person who is admitted as a partner into an existing firm does not thereby become liable to the creditors of the firm for anything done before he became a partner.”

[14]      In their Joint Consultation Paper on Partnership Law (2000), the Law Commission and the Scottish Law Commission state in relation to Scots law (at 10.65):

“Where the business taken over is substantially the same as the old firm, and where that business is continued without interruption, there appears to be a general presumption that the new partnership takes over the whole liabilities as well as the assets.”

[15]      Lord Hodge considered this point in Sim v Howat & McLaren [2011] CSOH 115 at [31]:

“The presumption does not arise unless there are facts and circumstances which bring it into play. The continuation of substantially the same business without interruption is necessary for the presumption.”

He suggested a number of other relevant facts and circumstances. They included whether the new partner had made a substantial capital contribution, whether he had paid or acknowledged any of the prior debts, and whether separate accounts were kept for the new and the old firm.

[16]      Lord Hodge determined at paragraph [29] that the appropriate test was whether a new partner had “accepted liability either expressly or tacitly” for the claim.

[17]      Who is responsible for averring those facts and circumstances? The answer is clear. In Thomson Balfour v Boag & Son 1936 SC 2 Lord Fleming stated (at p16) that “it was for the pursuers to prove” that a new partner had accepted liability for the debts of the old business.

[18]      Similarly in Miller v Macleod 1973 SC 172 Lord Justice Clerk Wheatley stated (at p183):

“whether in the circumstances the pursuer has established by presumption or by proof of facts and circumstances that the new firm agreed to adopt the old debts and become liable for them. Of course, the establishment of the presumption itself is dependent upon sufficient facts being proved to sustain it, and this in my opinion entitles the Court to look at all the facts, whether they occurred before, at or after the establishment of the partnership.”

[19]      In the present case, the liquidator does not offer to prove such facts and circumstances.  Instead, he states in condescendence 1:

“the defenders have been called upon, but failed, to provide to the pursuer the evidence (including a copy of the relevant partnership agreement(s) and copies of the accounts showing capital contributions made by the partners joining the partnership after December 2008) that any new partners who joined the partnership of Levy & McRae have not, in fact, undertaken liabilities of the partnership which were in existence prior to them joining. Accordingly, all the defenders are properly convened.”

[20]      In my view, that averment fails to satisfy the test identified by the Inner House. There are no averments that would allow the liquidator to lead evidence that the three individuals either expressly or tacitly agreed to take over the existing liabilities of the previous firm.  It does not set out the basis upon which the three individuals are convened. Instead it inverts the normal rule that the pursuer must plead his case.

[21]      Given the serious nature of the allegations and the size of the claim, the liquidator required to identify the basis upon which each defender had been convened.  He also had to differentiate between the acts of those individuals who had been partners at the material time and those who had been assumed after 2007.

[22]      I shall therefore sustain the defenders’ first plea-in-law to the extent of dismissing the case, so far as laid against the third, sixth and seventh defenders.

[23]      In doing so, I observe that on 25 March, the defenders’ solicitors wrote three separate letters to the pursuer’s solicitors and stated:

“In terms of his partnership agreement, no obligation was imposed on [the relevant defender] in respect of acts or omissions prior to his assumption, nor did he provide any indemnity in respect of such matters.”

Minute of Amendment

[24]      In the minute of amendment, the pursuer seeks (a) to alter the dates for the partners called as defenders to 4 January 2007 to date; and (b) to add five individuals, all of whom have been partners of Levy & McRae at some stage in that period. The relevant dates are as follows: Anne Bennie (2000 – 2008), Calum Anderson (1 July 2014) Laura Salmond (3 November 2014), Graham Craik (5 January 2015), and Stephen Hay 2007 (c6 months in late 2007).

[25]      The minute does not include any substantive averments to indicate the basis upon which these individuals are said to have taken over prior liabilities.  Accordingly, for the same reasons as given in relation to Messrs Gillies, Sleigh and Booth, I refuse to allow receipt of the minute.

[26]      The pursuer has had ample opportunity to investigate the position. Standing the very serious nature of the allegations, and the absence of a proper basis for seeking to add the five individuals as partners, I hold that it is not in the interests of justice to follow that course.

Disclosure of the Insurance Position

[27]      The pursuer seeks an order requiring the defenders to answer questions about the insurance position.  First, will the policy cover the claim?  Second, have the defenders notified a claim to insurers?  Third, have the insurers accepted the claim?

[28]      At the May hearing, the pursuer’s then senior counsel accepted that he was not entitled to ask for that information.  Lord Davidson, however, explained that the application had been made to elide the difficulty of identifying the correct defenders.  If the claim is covered by insurance, then that issue is much less important.

[29]      There is no Scottish authority in point.  In England the matter has been considered in the context of the court’s powers under the Civil Procedure Rules.  In West London Pipeline & Storage Ltd v Total UK Ltd [2008] EWCH 1296 (Comm), David Steel J refused to allow disclosure, although he also stated at [30]:

“The trend is strongly towards a more open approach to litigation. Albeit the potential for prejudice to the defendant and his insurers must be borne in mind, in the modern age of ‘cards on the table’ the question is readily posed why should not the one factor which may be key to a claimant’s view of the merit of pursuing a claim, namely what is the limit of cover and will the costs eat it up anyway, be known?”

[30]      In XYZ v Various [2013] EWHC 3643 (QB) Thirwall J ordered very limited disclosure to demonstrate that the defendant had sufficient insurance to fund its participation to the end of the trial.  The Court of Appeal has indicated that the matter is not free from doubt: Dowling v Griffin [2014] EWCA Civ 1445.

[31]      Lord Davidson suggested that I could use the wide powers contained in rule of court 47 to order disclosure.  I decline to do so. The details of insurance are a private matter between the insured and insurers.  There are major questions involved in disclosure, including the likelihood that it would encourage speculative “deep pocket” litigation: West London at [30].

Further Procedure

[32]      I shall allow a further period of ten weeks for open adjustment, with the qualification that all substantive adjustment should be completed within eight weeks.

[33]      That lengthy period is justified by three factors.  First, there have been recent extensive adjustments to the pleadings. Second, a hearing is due to take place before the Supreme Court of Gibraltar on 24 September in respect of a Letter of Request to recover the files of Hassans.

[34]      Third Lord Tyre has reserved judgment following a recent debate in similar proceedings raised by the liquidator against Burness Paul. Mr Clark said that the decision may have a significant bearing on the present action, as the arguments on prescription and loss are very similar.

[35]      Having regard to that third factor, I shall also fix a diet of debate.  Mr Clark estimated that it would last three days. Apart from the plea of prescription, the defenders mount eleven separate challenges to the relevancy of the pursuer’s averments.  

[36]      If the defenders are successful and obtain dismissal, that may save each party a considerable sum of money. Mr Clark estimated that a proof before answer would last about six weeks and cost each side several hundred thousand pounds.

Request for a witness statement from Peter Watson

[37]      The pursuer asks the court to ordain Mr Watson to provide a witness statement to explain the circumstances in which the sum of £9.5 million was paid to Hassans and the purpose of the payment of £200,000, made to him from Hassans’ client account on 23 December 2008. The pursuer seeks the statement to make his own averments “more pointed”.

[38]      I would be slow to order one witness to produce a statement in advance of the other statements. I find no compelling reason in this case to depart from the normal rule that there should be a simultaneous exchange of witness statements.  I therefore refuse the application.

SUDDEN EXIT, M’LORD: Documents reveal 30 day notice of top judge to quit post of Lord President - after battle with Parliament on judicial transparency & register of judges’ interests

I’m off in 30 days – top judge. THE EVENTS surrounding the sudden retirement of Scotland’s top judge Lord President Lord Brian Gill remain as shrouded in mystery as some court reports - as documents released by the Scottish Government reveal the short notice Brian Gill gave to Scotland’s First Minister - of his intention to leave office thirty days later on 31 May 2015.

Gill unexpectedly stood down from the role as head of Scotland’s judiciary earlier this year after waging  a bitter two year battle with the Scottish Parliament over plans to create a register of interests for judges.

The documents, released by the Scottish Government in response to a Freedom of Information request also reveal short exchanges between Stephen Humphreys of the Judicial Office & staff of the Scottish Government’s justice directorate – who appear to have been caught unaware by the sudden announcement.

In the Lord President’s letter to Scotland’s First Minister Nicola Sturgeon, Brian Gill (73) thanked members of the Scottish Government past & present for ‘their support’ during his tenure of office - support which included Scottish Ministers attempts to undermine and block a Scottish Parliamentary investigation into the judiciary’s secretive links to big business, financial interests and other vested interests.

In response, First Minister Nicola Sturgeon – who personally intervened earlier this year in a bid to thwart a register of judicial interests going ahead, praised Lord Gill for his service to the court.

The First Minister also wrote of Lord Gill’s “legacy to the justice system in Scotland” – referring to his work on the Scottish Civil Courts Review – sought to change some of the antiquated structures of Scotland’s expensive, closed shop and out of reach civil courts.

Just prior to the launch of the report on civil justice in Scotland – which took two years to complete, Lord Brian Gill condemned the civil justice system as “Victorian” and “unfit for purpose”

In a speech to the Law Society of Scotland’s 60 year anniversary conference several years ago, reproduced in full here Lord Gill said : “The civil justice system in Scotland is a Victorian model that had survived by means of periodic piecemeal reforms. But in substance its structure and procedures are those of a century and a half ago. It is failing the litigant and it is failing society.

“It is essential that we should have a system that has disputes resolved at a judicial level that is appropriate to their degree of importance and that disputes should be dealt with expeditiously and efficiently and without unnecessary or unreasonable cost. That means that the judicial structure should be based on a proper hierarchy of courts and that the procedures should be appropriate to the nature and the importance of the case, in terms of time and cost. Scottish civil justice fails on all of these counts. Its delays are notorious. It costs deter litigants whose claims may be well-founded. Its procedures cause frustration and obstruct rather than facilitate the achievement of justice."

In reality, much of Lord Gill’s recommendations contained in the Civil Courts Review were watered down by the Scottish Government who commissioned the Taylor Review - carried out at the insistence of the legal establishment - who feared giving the public easier and cheaper access to court would impact on the dwindling profits of Scots law firms.

The First Minister ends her letter by wishing Lord Gill the very best for his retirement.

However the former top judge's retirement appears to have been short lived after it came to light Lord Brian Gill is now sitting again as a judge on the UK Supreme Court, based in London.

From Lord President Lord Gill to First Minister Nicola Sturgeon:

I have today sent you formal notice of my retirement from the offices of Lord President and Lord Justice General.

I write to thank you and your predecessor, the Cabinet Secretary for Justice and his predecessor, and the civil servants in your various departments for all the support and encouragement that I have received during my tenure of office.

It has been one of the great privileges of my life to serve in the offices that I have held.

I am pleased to tell you that the work of the Superior Courts, civil and criminal, and of my Private Office is up to date. I have every confidence that the Superior Courts and my Private Office will continue to function efficiently while my successor is being recruited.

In response, the First Minister thanked the outgoing Lord President for service to the courts and tenure as top judge:

Letter from First Minister Nicola Sturgeon to Lord Gill:

Thank you for your letter of 1 May 2015, together with your formal letter informing me of your intention to retire from the offices of Lord President and Lord Justice General General as of 31 May 2015.

I am enormously grateful for the service you have given as a judge in Scotland since 1994 and, in particular, for your service in the offices of the Lord President and Lord Justice General over these past three years.

Your legacy to the justice system in Scotland will continue to endure in areas but I would highlight your proposals for the far-reaching reform of the civil courts system in Scotland that will result in a more modern and efficient court system fit for the 21st Century.

Once again, I am very grateful for your distinguished service and, may I take this opportunity to wish you and Lady Gill all the very best for your retirement

JUDICIAL TRANSPARENCY PETITION & SCOTTISH MINISTERS:

The judicial transparency petition – opposed by Scottish Ministers & Lord Gill - nevertheless enjoys cross party support. The petition has been the subject of a two year investigation by Holyrood and proposes the creation of a publicly available register of judicial interests containing information on judges backgrounds, their personal wealth, undeclared earnings, business & family connections inside & outside of the legal profession, offshore investments, hospitality, details on recusals and other information routinely lodged in registers of interest across all walks of public life in the UK and around the world.

Scotland’s first ever Judicial Complaints Reviewer (JCR) - Moi Ali gave the judicial transparency proposal her full backing. During the evidence session held at Holyrood in September 2013 - Moi Ali provided a first hand, honest and highly detailed account of the workings of Scotland’s judiciary and lack of judicial transparency & accountability.

Current JCR Gillian Thompson OBE gave further support for the plan to create a register of interests for judges during an evidence session at Holyrood in June 2015.

A full parliamentary debate on the question of creating a register of judicial interests was reported along with  video footage & the official record, here: Debating the Judges & here : Top judge & Scottish Government told to rethink refusal on declarations of judges as Holyrood MSPs support calls to create a register of judicial interests

Last Friday, Justice Diary revealed Lord Brian Gill has since come out of retirement and now sits on the supplementary panel of judges at the London based UK Supreme Court.

SUPREME, LORD: Scotland’s ex top judge Brian Gill who opposed Holyrood on judicial transparency & judges’ interests register - joins subs bench of UK Supreme Court

Lording it - Brian Gill moves to London. SCOTLAND’S former top judge – Lord Brian Gill who surprised the Scots legal world with the announcement of his sudden retirement in May 2015 - has been appointed to the supplementary panel of judges of the UK Supreme Court.

The UK Supreme Court today confirmed the appointment of Lord Gill to the panel of supplementary judges who sit on the London based UK Supreme Court.

A UKSC spokesperson said: “The supplementary panel on which Lord Gill is now a member has only been called upon once or twice in the last legal year. “

He added: “It is quite rare for the UKSC to invite Acting Justices to sit.”

Earlier this year, Brian Gill was invited to join the supplementary panel of judges - which can be called upon by the President of the Supreme Court to sit on specific cases where necessary.

The legislative framework for ‘Acting Justices’ on the UK Supreme Court states a person who holds the office of a senior territorial judge can be invited to act as a judge of the court at the request of the President of the Supreme Court. The legislative framework & conditions for such appointments is here: Acting judges & supplementary panel of UK Supreme Court

Now a UKSC supplementary judge - Brian Gill (73) – who became Scotland's longest serving judge - served a short three year term as Lord President.

Gill unexpectedly stood down from the role as head of Scotland’s judiciary after waging  a bitter two year battle with the Scottish Parliament over plans to create a register of interests for judges - Petition PE1458: Register of Interests for members of Scotland's judiciary

The judicial transparency petition which enjoys cross party support - has been the subject of a two year investigation by Holyrood and proposes the creation of a publicly available register of judicial interests containing information on judges backgrounds, their personal wealth, undeclared earnings, business & family connections inside & outside of the legal profession, offshore investments, hospitality, details on recusals and other information routinely lodged in registers of interest across all walks of public life in the UK and around the world.

Scotland’s first ever Judicial Complaints Reviewer (JCR) - Moi Ali gave the judicial transparency proposal her full backing.

During the evidence session held at Holyrood in September 2013 - Moi Ali provided a first hand, honest and highly detailed account of the workings of Scotland’s judiciary and lack of judicial transparency & accountability.

Current JCR Gillian Thompson OBE gave further support for the plan to create a register of interests for judges during an evidence session with msps at Holyrood in June 2015.

Scotland’s top judge Lord Gill did not take kindly to the transparency proposal – or the public debate around openness and accountability of the judiciary. 

Gill branded the media & court users as “aggressive” and demanded judges be allowed to keep their wealth and connections to big business – a secret.

Lord Gill then refused two invitations to appear before MSPs to face questions on his hostility towards judicial transparency.

The top judge – who took increasingly aggressive positions in his hard line letters to Holyrood - also hinted he may have to reconsider how judges interact with the Scottish Parliament and claimed loopholes in the Scotland Act prevented elected politicians from calling judges to account over their hidden interests.

Previous Lord President & Lord Justice General Lord Hamilton – who was highly respected while in the role as Scotland’s top judge - joined the UKSC supplementary panel after his retirement as Lord President in 2012. Lord Hamilton has not yet sat on the panel.

In stark comparison to Lord Gill’s anti-judicial transparency policy, Lord President Lord Hamilton moved to increase transparency around judicial expenses & travel during 2010 after law journalists from Diary of Injustice – the previous version of this law blog - submitted freedom of information requests asking for judicial expenses (routinely published in England & Wales) to be made available in Scotland. 

The FOI request was made to the Scottish Courts Service under the then Lord President Lord Hamilton - after the Scottish Government denied any figures existed for judicial expenses.

Some weeks after the DOI report on judicial expenses, featured in August 2010 - expenses claims of high earning Scots judges rake in at least £78K in ‘travel’ claims, Lord Hamilton amended Scottish Courts policy to publish judicial expenses figures on a quarterly basis.

The welcome move by Lord Hamilton was featured in a further article here: Part-time Sheriffs beat full-time colleagues & senior judges in expenses claims as Scots judiciary finally publish judicial expenses online.

TOP JUDGE WHO SAID NO TO TRANSPARENCY & SCOTTISH PARLIAMENT:

Scotland’s top judge Lord President Lord Brian Gill fiercely opposes calls for any form of transparency & public accountability of the judiciary and Scotland’s Courts.

Over the course of nearly two years, Scotland’s top judge Lord Gill waged an aggressive campaign against a Scottish Parliament investigation into calls for a register of judicial interests. The register proposal would reveal the judiciary's vast personal, undeclared wealth, extensive family and business connections throughout the legal profession, links to big business, offshore trusts & investments, ownership of numerous and high value properties through a variety of ‘creative’ arrangements, directorships, shareholdings, and even unpublished criminal records of members of the judiciary.

Lord Gill refused at least two invitations to appear before the Scottish Parliament to give evidence and face questions on his opposition to the proposal to create a register of judicial interests. The top judge has also used the Scotland Act as a loophole to avoid further scrutiny on the matter.

Lord Gill’s challenge to MSPs declared judicial opposition to transparency. In Lord Gill’s opening letter to MSPs on the call for a register of judicial interests, the judge claimed “In practical terms it would be impossible for all judicial office holders to identify all the interests that could conceivably arise in any future case. The terms of the Judicial Oath and the Statement of Principles of Judicial Ethics ensure that such a difficulty does not arise and that the onus is on the judicial office holder to declare any interest at the outset.”

In what was a hint of the sheer hostility felt by the judiciary against a call to bring transparency to judges interests, Lord Gill went onto accuse the media, press, litigants, court users and just about everyone else with an interest in transparency of being potentially hostile and aggressive, simply because someone may wish to raise questions of judges interests similar to the same kinds of questions which are raised of interests in other public officials and those in public life, politics & government.

And, if MSPs were unsure of the depth of Lord Gill’s attitude towards transparency, the top judge went on to refuse to appear before the Scottish Parliament, and used a loophole in the Scotland Act to justify his sweeping declaration he did not require to answer questions from Scotland’s democratically elected politicians. 

Lord Gill’s use of Scotland Act against MSPs was reported in the media. Writing in a letter to msps, Lord Gill implied cooperation with Parliament would be withdrawn over calls to make judges more transparent in register : “Section 23(7) of the Scotland Act provides inter alia that the Parliament may not require a judge to attend its proceedings for the purposes of giving evidence. This is not a loophole. It is a necessary part of the constitutional settlement by which the Parliament is established. Its purpose is to protect the independence of the judiciary, a vital constitutional principle that is declared in section 1 of the Judiciary and Courts (Scotland) Act 2008”

The judge continued: “When a committee invites a judge to give evidence before it, I have to decide whether the subject matter might infringe the principle of judicial independence; and whether the evidence required could be satisfactorily given in writing.”

As  Scotland’s top judge continued to oppose the creation of a register of interests, MSPs held a debate in the Scottish Parliament’s main chamber on Thursday 7 October 2014, which saw cross party support for the proposal. MSPs overwhelmingly supported motion S4M-11078 - in the name of Public Petitions Convener David Stewart MSP on petition PE1458, urging the Scottish Government to give further consideration to a register of interests for judges.

The parliamentary debate was reported along with  video footage & the official record, here: Debating the Judges & here : Top judge & Scottish Government told to rethink refusal on declarations of judges as Holyrood MSPs support calls to create a register of judicial interests

Previous articles on the lack of transparency within Scotland’s judiciary, investigations by Justice Diary including reports from the media, and video footage of debates at the Scottish Parliament’s Public Petitions Committee can be found here : A Register of Interests for Scotland's Judiciary