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Maintenance and champerty

August 18th, 2012

Those are the marvellous names for the old common law offences/torts involved in persuading others to engage in a lawsuit for your own benefit (feel free to state more precisely, IANAL).  They’ve mostly been abolished now, which is probably a good thing in terms of alllowing class actions and similar, and they’ve never applied (AFAIK) in international law.

Nevertheless, a reminder of the reason such laws existed has come with the announcement of a WTO complaint by Ukraine against Australia’s plain packaging laws for cigarettes.

These laws have just been upheld by the High Court, against claims that they represented a “taking” of “intellectual property”, in the form of cigarette brands. Not only is this a great result in substantive terms, but (although reasons have yet to be released) it clearly represents a rejection of extreme claims about property rights in general and IP in particular.

Coming back to the Ukraine case, tobacco trade between Ukraine and Oz is zero, and, AFAICT, the main involvement of the Ukraine in the tobacco industry is that the number of smoking-related deaths is particularly high there.

As no one even bothers to deny, this action has been ginned up by Big Tobacco in a shameless piece of champerty. Actually, it’s a good thing – the WTO is a political court, and it would be suicidal to uphold such a blatant attack on public health. In the process, it may set some precedents that will make future interference with public health laws more difficult.

Still, this is a direct attack by the tobacco companies on Australia’s national sovereignty, and deserves a response. Perhaps we should be looking at a special profits tax on tobacco companies.

Posted via email from John’s posterous

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  1. Tim Dymond
    August 18th, 2012 at 10:03 | #1

    Watch out John – the IPA will hit you with a major campaign of ‘freedom quotes’ from Martin Luther King and Frederick Douglas.

  2. Freelander
    August 18th, 2012 at 10:26 | #2

    Given that there is no intention by the Australian government to treat tobacco differently, in one way, the wto shouldn’t be involved. But I suppose the involvement is under the guise of infringement of intellectual property, a very long bow. There is way to much nonsense about IP nowadays. It seems before anyone can innovate nowadays they need to hire an army of lawyers.

  3. doug
    August 18th, 2012 at 10:26 | #3

    And for those (like me) not sure how to pronounce it (but who are familiar with the IPA), here it is in IPA (International Phonetic Alphabet): ˈʧæmpəti

  4. Freelander
    August 18th, 2012 at 10:29 | #4

    Sorry “differently according to country of origin “”.

  5. August 18th, 2012 at 11:12 | #5

    Don’t forget the other members of the “Coalition Of The Willing”, Honduras and Dominican Republic:

    http://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm

    “The Dominican Republic claims that Australia’s measures appear to be inconsistent with Australia’s obligations under:

    Articles 2.1, 3.1, 15.4, 16.1, 20, 22.2(b) and 24.3 of the TRIPS Agreement;

    Articles 2.1 and 2.2 of the TBT Agreement; and

    Article III:4 of the GATT 1994.”

    Maintenance: ‘An officious intermeddling in a suit which in no way belonged to one, by maintaining or assisting either party, with money or otherwise, to prosecute or defend it.’ (Mozley & Whiteley’s)

    Champarty/champerty is a type of maintenance where the person maintaining takes as their reward a cut of the winnings

  6. Katz
    August 18th, 2012 at 12:40 | #6

    Ukraine’s contribution to international jurisprudence rivals Ukraine’s contribution to haute couture.

    In no way has Commonwealth legislation impaired Big Tobacco’s rights in respect to their trademarks. As before the passage of this legislation, no other entity is entitled to use the trademarks of others without permission. And that right encompasses the entire scope of trademark law.

    Ukraine would look less foolish if it stuck to its knitting.

  7. Ikonoclast
    August 18th, 2012 at 14:03 | #7

    Is it possible to calculate and then levy a “maximum gain – maximum pain” pigovian tax or at least get it in the right ball park?

    By a “maximum gain – maximum pain” tax I mean one which;

    (a) achieves a highest possible net tax take after (b) below and/or a highest possible public benefit (like health) and/or a highest possible reduction in the negative externality producing activity; and
    (b) achieves this with least possible black market activity after necessary compliance and policing costs?

    If so, we must at once hit tobacco, alcohol and gambling with “maximum gain – maximum pain” taxes. And then follow by ramping carbon taxes up progressively to the “maximum gain – maximum pain” level. Drug decriminalisation could follow the same path, with high regulation and “maximum gain – maximum pain” pigovian taxes. The essential philosophy would be that primary human weakness would not be criminalised but that secondary profiteering (as opposed to profiting very modestly under very strict laws) on primary human weakness is criminalised.

    Best pragmatics and best moral principles could be harmonised by this approach.

  8. August 18th, 2012 at 16:22 | #8

    Excellent point Katz.

    A quick squiz at the various articles we are apparently breaching to terrorise the good citizens of Ukraine, Honduras and The Dominican Republic doesn’t look good for big tobacco’s argument.

    My brief summary:
    “treatment of foreign parties must be no less favourable than of nationals”
    “must be able to register trademarks”
    “exclusive right of owner of trademark to prevent others from using it”
    “prevent unfair competition” (what could be fairer competition than blind packaging??)
    “members shall not diminish protection of geographical indications”
    “imported products to be treated no less favourably than local products”
    “regulations not to have the effect of creating obstacles to international trade”

    Never mind ‘maintenance’ in a real court they would be looking at getting chucked out for being vexatious and an abuse of process.

  9. Freelander
    August 18th, 2012 at 18:37 | #9

    The concern has to be the extent to which the wto is peopled by ‘free’ thinkers of the IPA, CIS ilk. Many of these international bureaucrats are all for smashing nations’s sovereignty in the cause of creating a libertarian property rights free-for-all, or rather free-for-some.

  10. Ikonoclast
    August 18th, 2012 at 18:51 | #10

    Perhaps the libertarians would like to explain why they think non-libertarian China is outperforming the economically libertarianised Western Hemisphere. Indeed the more economically libertarianised we in the West become, the more our economies plummet. Witness the US and EU. Australia survives relatively unscathed for the moment because we are still significantly less libertarianised, rationalised and privatised than some in the Western Hemisphere. Plus we are lucky to benefit both ways from China’s performance by exporting with higher commodity prices and importing cheap goods.

  11. Freelander
    August 18th, 2012 at 19:33 | #11

    @Ikonoclast

    Don’t worry. For many years now, conservative and libertarian pundits have been explaining, in great detail, how the Chinese economy is just about to crash and burn. We will then wake up as if from a dream sequence, and the rise of China will have never happened.

    This piece of wishful thinking could explain why western ‘leaders’ are making no preparations for the reality that will include an economically powerful China. Sort of like their head in the sand reaction to climate change.

  12. Xevram
    August 19th, 2012 at 11:43 | #12

    Good piece Prof Q, when I read this and I see the words “Intellectual property”, being a Territiorian I am mindfull of Australian Indiegenous Intellectual Property rights.
    This is a potentianlly huge issue and of course not just linked to logos and art work, but perhaps even more importantly relevant to ethnobotanical property rights.
    I have been doing some reading on this very recently and came across this research at ANU. “Indigenous Peoples’ Innovation and Intellectual Property: The Issues.
    Peter Drahos and Susy Frankel”
    In part, this quote I find very instructive:
    “Supporting indigenous innovation requires an integrated model of IP rights, real property, and traditional law and customs. That poses a challenge for Western legal traditions that have over a long period parsed property into finely grained taxonomies of real and personal property rights, the latter underpinning complex processes of securitisation in early, middle and late capitalism. In Australia, the High Court has recognised the spiritual dimension of Aboriginal native title, but has also made it clear that native title rights and interests do not constitute a separate system of IP for the control of cultural knowledge. Native title is not an institution of the common law, but its interpretive evolution does take place within the basic structure of Australia’s statutory and common law property institutions. This considerably diminishes the prospect of Australian courts recognising a system of native title rights for the control of intangible property.”

    How is all of this relevant to tobacco and the current court decisions, tobacco use in Indigenous communities is currently at much higher levels than in other comparable communities. It is generally recognised that one of the most effective ‘ways forward’ for improving outcomes for Indigenous Australians is based around self-empowerment and ownership. I believe that Intellectual property ownership in all its forms is central to this empowerment.

    http://epress.anu.edu.au/apps/bookworm/view/Indigenous+Peoples%E2%80%99+Innovation%3A+Intellectual+Property+Pathways+to+Development/9731/ch01.html

  13. Freelander
    August 19th, 2012 at 12:15 | #13

    Native IP is simply more IP pure bunk, and most of the revenue from the fencing off of old intellectual contributions on an ethnic basis will likely go not to those who coincidentally share the particular ethnicity, but rather to those innovative facilitators (usually of different ethnicity) who invent and defend the created property right.

  14. Freelander
    August 19th, 2012 at 12:19 | #14

    “spiritual dimension” Humbug. Humbug on stilts.

  15. John Quiggin
    August 19th, 2012 at 14:17 | #15

    Freelander, please try for a less combative tone in comments

  16. Nick
    August 19th, 2012 at 15:31 | #16

    I posted a couple of links yesterday which didn’t make it through the filter…one was in relation to Demonoid being taken down while Valeriy Khoroshkovsky visited the United States for the first time the other week to talk about copyright infringement. The other, his April meetings in Brussels with the EBA discussing among other things “overregulation of selling prices for alcohol and tobacco products, ban on respective products’ promotion and advertising”. The Ukraine seem keen to cut a lot of deals for new friends atm…Katz and others, is this all about their EU bid, or is that too simplistic?

  17. Freelander
    August 19th, 2012 at 15:57 | #17

    Courts commenting on “spiritual dimension”, what next! Judges do manage to talk some unbelievable nonsense at times. Guess that’s where the idea of drunk as a law lord. As for the admonition never understood some of your behaviour either, so if you have a continue to have a problem then rather than editorialise just ban me.

  18. Katz
    August 19th, 2012 at 21:51 | #18

    Nick, it looks to me that Ukraine’s WTO frolic is a symptom of its status as a shambolic kleptocracy:

    Kommersant Ukraine failed to get a comment from Valery Pyatnitsky, the Ukrainian government’s envoy for Eurointegration.

    A source close to the Ukrainian Economics Ministry said he was surprised by Ukraine’s complaint because the interests of Ukrainian tobacco producers were not affected.

    According to the Ukrainian State Statistics Service, Ukraine does not export tobacco products to Australia.

    Yelena Tishchenko-Tishklovets, a manager of British American Tobacco Ukraine, told the paper that the Ukrainian Tobacco Association had discussed this issue in the context of expanding Ukraine’s export possibilities.

    http://forua.wordpress.com/2012/03/15/ukraine-files-wto-complaint-over-australian-tobacco-law/

  19. TerjeP
    August 19th, 2012 at 22:00 | #19

    Still, this is a direct attack by the tobacco companies on Australia’s national sovereignty, and deserves a response. Perhaps we should be looking at a special profits tax on tobacco companies.

    Should a conservative government put a special tax on environmental organisations if it finds them somewhat objectionable? Perhaps the government of the day if challenged on a legal matter should just employ a lawyer. This mentality of using tax policy as a weapon of retaliation is rather pathetic.

  20. Mel
    August 19th, 2012 at 22:53 | #20

    Freelander: “As for the admonition never understood some of your behaviour either, so if you have a continue to have a problem then rather than editorialise just ban me.”

    You’d be no loss.

  21. Freelander
    August 19th, 2012 at 23:08 | #21

    Champerty is an interesting common law offense. JQ, I was wondering if you had had a reference for when it came into being, and how? Sometimes some of these strange offenses came into existence for quite peculiar reasons.

    Mel . Thank-you for your kind thoughts.

  22. Freelander
    August 20th, 2012 at 00:23 | #22

    Belay that request, Wikipedia directs to some excellent references on the history and as expected the history is fascinating.

  23. Nick
    August 20th, 2012 at 01:50 | #23

    Thanks, Katz. I don’t know anything about Ukranian politics, but the more I read, the more that makes sense. Nice to have a government here which at least tries to maintain a thin veneer of not working solely at the behest of its corporate interests.

    http://www.reportingproject.net/underground/index.php?option=com_content&view=article&id=8&Itemid=21

    Heh. Plain packaging will increase smuggling and contraband? It’s the big cigarette manufacturers themselves who’ve been found guilty of colluding with smugglers. One third of all cigarettes manufactured worldwide are sold on the black market – not counterfeit or chop-chop, big name brands – this is entirely in the interest of the manufacturers. Plain packaging would make this much more difficult, not easier.

  24. Nick
    August 20th, 2012 at 01:53 | #24

    Some more information here on cigarette manufacturers’ connections with smuggling:

    http://tobacco.health.usyd.edu.au/assets/pdfs/tobacco-industry/reporttosociety.pdf

  25. J-D
    August 20th, 2012 at 17:34 | #25

    I think the only other place I’ve heard of champerty is _To Kill A Mockingbird_, where there’s a passing reference to an impossibly complex lawsuit between the Cunninghams and the Coninghams which the judge ultimately threw out on the grounds of champertous connivance. I’ve always remembered that phrase. (The Cunninghams and the Coninghams didn’t care. They just wanted the chance to say their piece in court and were wholly satisfied with having got it.)

  26. Freelander
    August 20th, 2012 at 18:42 | #26

    Champerty is interesting because someone with a good basis for a suit ought not to lose simply due to insufficient funds but during someone without a good cause is a great way for the wealthy to harass someone, if there were no sanctions against it. In international law seems might is right in the end because the mighty can ignore those courts. The international criminal court is a joke as you will never see any of the mighty in the dock, and those in the dock, although guilty, are only there as a result of some political offense rather than what they’re charged with.

  27. Freelander
    August 20th, 2012 at 18:44 | #27

    Suing not during?

  28. jrkrideau
    August 21st, 2012 at 04:33 | #28

    @Freelander
    http://en.wikipedia.org/wiki/Strategic_lawsuit_against_public_participation

    Apparently at least one or two Canadian provinces and a number of US states have SLAPP laws to discourage the rich from too blatantly harrassing opponents. I suppose they are not anti-Ccamperty laws but perhaps the rev

    Anything in Australia?

  29. Freelander
    August 21st, 2012 at 07:57 | #29

    @jrkrideau
    Did economics rather than law, but did Law 101 out of interest while at university. It included English legal history which was fascinating. From memory, the real reason a judicial system was supplied to the peasantry was not any real concern for the peasants but because small disputes could become major unrest as friends and relatives joined in on both sides. This would “disturb the kings peace” and McKenzie revenue raising and the raising of troops a problem, or even become a worse threat to the crown and aristocracy. Hence,justice was provided for the kings benefit really. Better the kingprovide justice than have the country riven. Murder then was really a crime against the king as were other crimes because they disturbed his peace.

    Hence, I’m certainly no expert don’t know Australian law but do find the history interesting. Legal history is a history of people arguing, solving problems and coming to conclusions with the social context, religious and philosophical beliefs of the times having a bearing, and in addition, the ever present self-interest.

  30. August 22nd, 2012 at 11:01 | #30

    Freelander: George Orwell said: “The most powerful lie is the omission.” Legal academics’ version of legal history, if they bother with it at all, has to omit some ugly bits, otherwise lawyers and judges would know that Professor Fred Rodell, of Yale law school, was right when he said our system is “nothing but a high-class racket”.

  31. derrida derider
    August 28th, 2012 at 15:04 | #31

    @Mel

    I agree – John should take advantage of that invitation

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