United Kingdom

Regulation and Governance of Mutual Funds: United Kingdom and United States of America Perspectives on Investor Protection

/ essexlawresearch / Leave a comment

Image credit: routledge.com

By Dr Mohammed Alshaleel, Essex Law School

Dr Mohammed Alshaleel recently published Regulation and Governance of Mutual Funds: United Kingdom and United States of America Perspectives on Investor Protection. This book provides a detailed analysis of mutual fund regulations and governance in the UK from the investor protection perspective. It comprehensively describes mutual funds by their function, social utility, and legal attributes, examining the level of protection provided to retail investors under existing regulations.

Mutual funds are externally managed with fund ownership separated out from their management, which carries a potential conflict of interest between the self-interests of the fund management and each fund’s investors. The book provides an in-depth analysis of this agency problem in the mutual fund industry, comparing the competing governance models in the UK and the US and the supervision of management activities.

In the UK, the book investigates the main governance mechanisms, including disclosure, the effectiveness of voting rights, and the role of the Financial Conduct Authority in protecting investors. It also considers the role of prudential regulations in protecting mutual fund investors, with a particular focus on risk management and mutual fund liquidity crisis. The book further investigates the impact of the withdrawal of the UK from the European Union (Brexit) on the industry and what this means for the future of the undertakings for collective investment in transferable securities (UCITS) in the UK.

The concept of mutual funds is still not clearly understood, so this book will clearly define the different legal and practical aspects of mutual funds. It will be the first substantial study of mutual fund governance mechanisms under the existing mutual fund laws and regulations in the UK.

Further information on this book can be found here.

A Human Rights Case for the Proportionality Assessment of Evictions in the Private Rental Sector

/ essexlawresearch / Leave a comment
Image via Shutterstock

By Dr. Koldo Casla, Lecturer in Law and the Director of the Human Rights Centre Clinic

In the 2008 case of McCann v UK, which concerned the eviction of a family renting a house from a local authority in England, the European Court of Human Rights established that:

“(T)he loss of one’s home is a most extreme form of interference with the right to respect for the home. Any person at risk of an interference of this magnitude should in principle be able to have the proportionality of the measure determined by an independent tribunal”.

Para 50, emphasis added

In a decision on admissibility ten years later, FJM v UK, the Court restricted the principle above to evictions in the public sector. Despite the wording in McCann, the proportionality test would not really apply to any person, but only to tenants in the same situation McCann found himself in, namely, social/public housing tenants.

In my new article in European Human Rights Law Review, I argue that the European Court of Human Rights should reconsider the position expressed in FJM v UK, and establish that evictions with no proportionality test are contrary to the right to home of Article 8 ECHR, also in the private rental sector

In FJM v UK, the European Court went as far as to say that, if tenants were entitled to require national judges to examine the proportionality of an eviction before ordering the possession of their home, ‘the resulting impact on the private rental sector would be wholly unpredictable and potentially very damaging’ (para 43, emphasis added).

This article shows that this need not be the case, and that in fact before reaching such a conclusion the European Court should have examined European comparative practice and national legal orders, as well as other human rights obligations. This article makes the case for a proportionality assessment of all evictions, irrespective of public or private ownership. The scope of the margin of appreciation requires an analysis of the common ground that may exist in European comparative practice and in light of other international human rights obligations accepted in the continent. The social function of homeownership provides the ground to achieve a better balance between the right to private property, the right to private and family life, and the right to housing.

Neither Article 11 ICESCR (on the right to adequate housing) nor Article 8 ECHR (on the right to home as part of private and family life) would give tenants a blank check to stop paying their rent or to break the lease in any other way. And giving judges the power to assess the proportionality of an eviction in the private rental sector would not fix all the housing problems. But it would be an important first step towards a more balanced relationship between landlords and tenants.

Article full citation: Koldo Casla, ‘Unpredictable and damaging? A human rights case for the proportionality assessment of evictions in the private rental sector’ (2022) (3) European Human Rights Law Review 253-272. Available on WestlawUK here (login required).

Prescripted Living: Gender Stereotypes and Data-Based Surveillance in the UK Welfare State

/ essexlawresearch / 1 Comment
Photo by cottonbro from Pexels

From the post-war welfare state that inherently assumed married women would be supported by their husbands, to the 21st-century introduction of Universal Credit which financially disincentivises some women in cohabiting relations from working: the welfare benefits system in the UK has historically favoured individuals who conform to gender stereotypes.

At the same time, the welfare benefits system also uses more and more surveillance of claimants to determine who is ‘deserving’ of support, using increasingly sophisticated data analysis tools to impose conditions on welfare claimants and punish those who do not comply.

Laura Carter, PhD candidate in the Human Rights, Big Data and Technology Project at the University of Essex’s Human Rights Centre, published a new article in Internet Policy Review, which argues that both stereotyping and surveillance reinforce structures of categorisation – in which individuals are treated according to group membership (whether or not it is accurate) and control, through normalising some behaviours while punishing others.

The article argues that the combination of gender stereotyping and surveillance in the UK welfare state risks creating a vicious cycle, in which the categorisation and control dimensions of both stereotyping and surveillance reinforce each other.

This increases the likelihood of the system coercing welfare claimants—by definition, people living on low incomes—into certain ‘accepted’ behaviours, and discriminating against those who do not conform.

The increased conditionality of welfare benefits has already caused demonstrative harm to those who cannot or struggle to access Universal Credit. The article further argues that the coercive, surveillant nature of the welfare state risks cementing hierarchies of power that continue to stereotype and discriminate against low-income people.

This is the case particularly for low-income women who are expected to balance the demands of their disproportionate unpaid caring responsibilities as well as increasing requirements for job search activities.

Carter’s article applies a human rights analysis—including recognition of the harms of gender stereotyping, as recognised by the Committee on the Elimination of Discrimination against Women (CEDAW Committee) —to this system of coercion and conditionality, in order to make visible analysis the specifically gendered nature of the harm caused by surveillance and conditionality to welfare benefits claimants.

Applying analysis of gender stereotyping can further identify—and combat—harms that are inherent in the current structure of the welfare benefits system in the UK, with the aim of ensuring that benefits are accessible for all who need them.

Article full citation: Carter, L. (2021). Prescripted living: gender stereotypes and data-based surveillance in the UK welfare state. Internet Policy Review, 10(4). https://doi.org/10.14763/2021.4.1593

Police and Crime Commissioners: A Dislocated Expectation?

/ essexlawresearch / 1 Comment
Image by James Eades

New research, based on exclusive interviews with high-ranking figures from across UK policing – including Chief Constables, PCCs, one of the most senior persons in policing and one of the persons involved with introducing PCCs – suggests a postcode lottery in police accountability. The calibre of individual PCCs is seen as the key factor in ensuring adequate oversight, with stark differences exposed between forces.

Dr. Simon Cooper, from the Essex Law School, gained unprecedented access to key figures from all sides, on the condition of their anonymity.

Dr. Cooper’s findings, which were published in Policing: A Journal of Policy and Practice and subsequently cited in the House of Commons Police and Crime Commissioners 2021 Report as well as House of Lords 2022 Report Police and Crime Commissioners: Powers and Functions, support the argument that the current system can work.

However, Dr. Cooper identifies a “significant anomaly”, with accountability dependent on the relative strengths of PCCs and Chief Constables and the relationship between the two. Success, in this respect, can be seen to “hinge on luck”.

Dr. Cooper said:

“These findings suggest a significant variation in how police accountability is administered around the country. While one Chief Constable described being regularly ‘grilled’ by their PCC, some Commissioners are seen as ill-equipped, ill-prepared and potentially ego-driven. The importance placed by the system on these single individuals suggests there is a real possibility that some Chief Constables are being held to account more effectively than others.”

One Chief Constable, identified as Chief Constable D, outlined the issues that exist when dealing with their elected PCC, contrasting it with the previous ‘tripartite’ structure, where Chief Constables would report to the Home Secretary and their local Police Authority:

“…there is a significant risk that the relationship (between PCC and CC) either becomes excessively hostile, excessively friendly or… there isn’t the balance, additional questioning or informing of the debate that a wider group would give. (…) Because of poor safeguards and governance arrangements it too quickly descends into personalities and subjectivity in which accountability becomes likeability, becomes re-electability. Accountability becomes all of those things it shouldn’t.”

Another Chief Constable, Chief Constable C, underlined the importance of the PCC-Chief Constable relationship, noting the impact of individual experience and characters:

“I have seen evidence of PCCs who are ill-equipped and ill-prepared and actually don’t have the skills to understand big organisations making sweeping statements and making assumptions about individuals without any basis whatsoever. I have also seen Chief Constables that do not want to adapt to a new way of working and will be very obstructive towards PCCs.”

Summarising the impact on oversight, Police and Crime Commissioner D asked:

“The question is can a PCC be played by a Chief Constable? They clearly could be and some I suspect are. I am quite sure that there are some Chief Constables who just pay lip service to their PCC.”

The current system was seen by some as placing an impractical burden on one individual. The lack of a ‘pool of different views’ limits opportunities for the PCC to moderate their thoughts and has the potential to leave the PCC either exposed or guided by advice from others, with no formal oversight role. PCC A commented:

“Presumably if it’s something they (the PCC) didn’t know a lot about they talk to a lot of people about it but you don’t see any of those conversations played out.”

In reality, one senior figure, Person Z, was left questioning the original design of the PCC system:

“For one person, even though they are elected, to replace the wisdom and contribution of 19 [Police Authority members] is a tall ask. There’s only one person [the PCC] providing scrutiny [of Chief Constables] and that’s a heavy responsibility, so in terms of scrutiny of course it’s a lot less. Palpably has it worked? No… I suspect PCCs might, in hindsight, be regarded as a blunder.”

Dr. Cooper’s findings suggest a need for the Home Secretary to review the Policing Protocol and for an Accountability Code of Practice to be issued. He said:

“This research encourages the Home Secretary to exercise their power and urgently review The Policing Protocol Order. In its current form, the PPO is overly broad, presumption-based, loosely-worded and generic, with a resulting impact on accountability.”

Dr. Cooper’s research is published at a time of a continuing debate on police accountability. The Police Foundation found a “crisis of confidence”, recommending “root and branch reform”, and Her Majesty’s Inspector of Constabulary and Fire & Rescue Services recommended a “profound and far-reaching police reform” and there have been calls for a Royal Commission.

Dr. Cooper’s research also found that in some instances the PCC model is viewed favourably when contrasted with its forerunner, with the previous bureaucracy and resulting backlog replaced by a “single point of decision-making” and a greater “visibility” of the decision-making process at a local level.

Other interviewees, however, suggested such appearances could be deceptive. PCC E commented:

“We have gained in terms of visibility but lost in terms of detailed scrutiny that the Police Authority was capable of.”

Dr. Simon Cooper’s article titled ‘Police and Crime Commissioners: A Dislocated Expectation?’ was published in Vol. 15, Issue 3 of Policing: A Journal of Policy and Practice and can be accessed via the publisher’s website here. The House of Commons report on PCCs, citing Dr. Cooper’s research (pp. 10-11), can be read here. The House of Lords report also citing his research (para. 1.3) can be read here.

This ELR post was updated on 10 November 2022 to reflect recent developments in the impact of Dr. Cooper’s research.

Redesigning Slavery Through Law: A Play in Four Acts

/ essexlawresearch / Leave a comment
Photo by Hermes Rivera

Dr. Marija Jovanovic’s work was selected for presentation at the 2021 Midyear Meeting of the American Society of International Law.

The meeting, which will be held on 11-12 November 2021, encompasses several events, including the Research Forum, which features cutting-edge international law scholarship by more than 70 authors and is open to the public. Registration details are available here.

Marija’s presentation is titled ‘Redesigning Slavery Through Law: A Play in Four Acts’ and will be hosted by the Reimagining International Law panel, chaired by Professor Noah B. Novogrodsky of the University of Wyoming College of Law.

Marija’s paper investigates, in particular, the relationship between the law and slavery including ‘modern slavery’. It argues that just as states in the Global North have maintained ‘traditional’ slavery using law as a primary tool, so have they substituted the old with ‘modern slavery’ to accommodate and fulfil the needs of the present-day global economic order and political reality. This contradicts their projected image of the champions of the abolitionist movement and the recent global action against ‘modern slavery’.

This work is situated within Marija’s broader research on modern slavery and human trafficking, which explores how various aspects of law both contribute to and work to suppress these practices. It builds on her doctoral work, which is further developed in the book on State Responsibility for ‘Modern Slavery’ in Human Rights Law: A Right Not to be Trafficked forthcoming with the Oxford University Press in 2022.

Making the Right to Housing Real in Newcastle

/ essexlawresearch / 1 Comment
Photo by Jack Foster

Dr Koldo Casla, Lecturer in Law and Director Human Rights Centre Clinic, Human Rights Local Project Lead

In June 2019, Newcastle City Council and Crisis announced a partnership to end homelessness in the city within ten years. An evidence review took place in 2020 and 2021 to inform the development of such partnership. Based on that evidence review and other documentary sources, I wrote a report to examine how Newcastle City Council can implement the internationally recognised right to adequate housing. The full report is available here.

The evidence review included frontline perceptions of homelessness provision and associated services operating in Newcastle, participatory research with people with lived experience of homelessness, an analysis of current local expenditure, how the local authority collects data, and the impact of national health, housing or social security policies in Newcastle.

On that evidential basis, I looked at Newcastle’s policy and practice on homelessness in light of the right to adequate housing as recognised in international law. The purpose of the report is to analyse what human rights may offer to end homelessness in Newcastle, connecting the evidence with human rights principles and standards.

Adequate housing is recognised as a human right in international law, particularly in Article 25 of the Universal Declaration of Human Rights and Article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Housing is more than a roof over one’s head and more than a mere commodity. Housing, as observed by the UN Committee on Economic, Social and Cultural Rights (CESCR), “should be seen as the right to live somewhere in security, peace and dignity.”

The adequacy of adequate housing is determined by seven criteria:

  1. Legal security of tenure, including protection from forced evictions, irrespective of the type of property and tenure (homeownership, lease, informal settlement, etc.);
  2. Availability of services, materials, facilities and infrastructure, including access to natural and common resources, all of which is essential for health, security, comfort and nutrition;
  3. Affordability, including protection from unreasonable rent levels and increases, so as not to compromise or threaten the attainment and satisfaction of other essential needs and rights;
  4. Habitability, in terms of protection from cold, damp, heat, rain, wind and other threats to health and safety;
  5. Accessibility, paying particular attention to the requirements of groups and individuals at greater risk of harm, disadvantage and discrimination;
  6. Location, allowing access to employment, healthcare services, schools, transport and other facilities, bearing environmental conditions in mind; and
  7. Cultural adequacy, using materials and tools that recognise and express appropriately the cultural identity and diversity of the population.

Human rights obligations extend to all branches and all public authorities, national and local. The practical content of human rights obligations, however, depends on the availability of resources. Years of austerity have significantly diminished those resources for local authorities, despite an ever-greater need for social protection.

Public authorities bear the responsibility to prove that they are putting in place the most appropriate policies, allocating all of their available resources in the most strategic way, to fulfil the right to adequate housing.

Newcastle was one of the three cities worst affected by welfare reforms in cumulative terms, alongside Manchester and Central London, with losses of over £2,000 per household in the 2010s. Austerity also materialised in cash-strapped local governance, which resulted in diminishing resources to prevent and tackle homelessness, and to deliver other public services. Newcastle faced an overall budget cut of 32% between 2010-11 and 2018-19.

Despite the UK context of austerity in public spending, the city managed to mobilise available resources to limit the impact and prevalence of homelessness. A comparatively large stock of council homes (around 26,000) provides a structural baseline to prevent and tackle homelessness. During the years of austerity-driven national policies, Newcastle largely avoided cutting public spending on housing and homelessness. With its preventive approach, Newcastle City Council managed to make the most of available resources, which are nonetheless limited considering existing demand, relatively high levels of poverty and destitution, and the cumulative consequences of austerity and Covid-19.

The right to adequate housing includes a requirement on public authorities to ensure that nobody is rendered homeless as a result of an eviction. This means that local authorities must adopt reasonable measures to provide adequate alternative housing solutions.

There was a 75% reduction in the number of evictions from Newcastle’s council housing between 2007 and 2020. Unlike other core cities, Newcastle does not use B&B accommodation as a temporary solution. The city has a single-site purpose-built supported accommodation facility with 720 beds in self-contained units at Cherry Tree View.

The relative low level of homelessness in Newcastle has been attributed to a combination of factors, particularly the preventive approach (before the 56-day target of the Homelessness Reduction Act 2017), the availability of a large stock of council homes (conductive to higher social lettings and lower private rent levels), and a financial commitment from the local authority.

However, interviewees and focus group participants identified hostels, particularly larger hostels, as potentially harmful for the city’s homeless population. In line with international human rights standards, temporary accommodation should only be used exceptionally, it must not put personal safety at risk, cannot become a long-term solution, must not separate family members, and must provide space to respect individual’s privacy.

Families are kept together in Cherry Tree View, where there are no shared rooms, so everyone has their own private space, their own apartment with toilet and kitchen. In other accommodation, these facilities would be shared.

Adequate housing must be accessible for everyone. This means public authorities should take proactive measures to ensure that housing is accessible also for groups and individuals who, due to different reasons, may face particular difficulties in accessing adequate housing.

Housing solutions for people seeking asylum should be culturally adequate, including community support, and proximity of places for worship and shops. This should be a consideration in the general suitable and sustainable homes checklist. Newcastle City Council and the Home Office should explore ways to ensure that the Council receives notice at least 56 days in advance.

Newcastle should also accommodate people who are homeless based on need alone, including people with no recourse to public funds, particularly when children are involved. The local authority should refuse to co-operate with immigration rules that infringe the right of local residents to feel safe at home.

Newcastle should ensure that survivors of domestic abuse are given priority access to a housing alternative should they need it.

The principle of active participation speaks to the spirit of involving everyone in the community in the delivery of the ambitious goal of ending homelessness. Inasmuch as possible, meaningful engagement between public authorities and the voluntary sector should include people with lived experience of homelessness, who should be listened to in the identification of challenges and possible solutions. There is no better way to defend social rights than to hand over a megaphone to the people most affected by inequality, public spending cuts and social exclusion.

Newcastle City Council is demonstrating a high dose of audacity and commitment by embracing a human rights-based approach to housing. Creating the material conditions for the fulfilment of all human rights, including the right to adequate housing, is a collective task that should concern everyone in society. This includes public and private actors, particularly when private actors receive public funds. Years of austerity have resulted in diminishing resources available to local authorities, and Newcastle City Council has been particularly affected. Yet, the evidence shows that Newcastle has achieved remarkable results despite the limitations. To ensure non-retrogression in human rights, Newcastle should maintain its proactive and preventive approach to end homelessness, above and beyond the relief and refer duties of the Homelessness Reduction Act 2017.