The Lanchashire Vessel Incident and the Faulty Equipment Act

Explain in your own words the material facts in the case. (25%)

This case concerns Leo Yates (deceased) and the respondent company, a cargo carrier ‘The Lanchashire’. The vessel was about 90,000 tons and sank off at the coast of Australia, to which multiple losses occurred including the death of the Leo Yates due to the negligence of the defendant company as claimed by the plaintiffs. On 5th February, 1982, the Plaintiffs reached the Admiralty Court against Thomas Tanker Ltd and claimed damages for the death of Leo Yates as it was purely negligence on their part and had severe defects in the construction and design of the ship. Belinda and Simon Yates are personal administrators of Leo Yates and has appealed to the Court of Appeal from the decision reached on 27th January, 1987. Froome J. decided the case preliminarily on plaintiff’s favour that the cargo carrier would be covered under the meaning of ‘Equipment’ of Section 1 of the Faulty Equipment Act, 1970.

Explain in your own words the legal issue(s) in the case. (25%)

Since, the primary defence used by the defendant was that the vessel could be included within the meaning ‘equipment’ as held under Section 1 of the Faulty equipment Act, 1970. Therefore, the main issue arises as whether the vessel was equipment provided by the defendant within the meaning of section 1of the Faulty Equipment Act 1970.

(a).What technique(s) of statutory interpretation do you consider Lord Pantaniemployed in the judgment? Include in your answer how he uses (or applies)the technique(s) to assist him.

The interpretation Lord Pantani employed was largely based on the Golden rule of interpretation which allows the judges to interpret the word ‘equipment’ as held under Section 1 of the Faulty Equipment Act, 1970, in the widest form possible with a goal to include any and every kind of article used by an employer for the purpose of his business, despite whatever has strictly been enumerated by the legislature in the original statue. In this instant case, Lorn Pantani, in an attempt to deliver justice and keeping in mind the consequences of applying the literal interpretation of the word ‘equipment’, which will not only cause irreparable loss on part of the

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1. All Answers ltd, 'The Golden Rule of Statutory Interpretation' (Lawteacher.net, April 2021) accessed 29th April 2021

plaintiff but also set a harmful precedent in the area of vicarious liability as has been set out under the Faulty Equipment Act, 1970.

What aids to statutory interpretation do you consider Lord Pantani employedin the judgment? Explain whether they are ‘intrinsic’ or ‘extrinsic’ (25%overall)

The aids to statutory interpretation used by Lorn Pantani in delivering the judgement had both the elements of ‘intrinsic’ and ‘extrinsic’ within their own scope. Intrinsic aid to statutory interpretation that provides the Judge with the necessary guidance, explanation such as the long tile used in para 3 of the instant Judgement, where it has been enumerated under the Faulty Equipment Act, 1970 that the employer shall have the utmost liability towards his employees for any injury which is attributed to any defect in equipment provided by the employer in the course and for the purpose of his/her business and/or any such other purposes connected with the above referred circumstances whatsoever.

Extrinsic Aid refers to such form of help the Judge derives which is external and outside the Act itself. In this instant judgement, Lorn Pantani used external and/or dictionary references for the purpose of defining the word ‘equipment’

Explain in your own words the ratio decidendi of the case. (25%)

The ratio decidendi of the case can be traced from para (2) of the said judgment where it has been mentioned that the key element in implementing the Faulty Equipment Act, 1970 is to impose the vicarious liability between an employer and an employee, where an injury was due to the negligence on part of the employer, regardless of the circumstances. The use of Golden Rule of Interpretation herein establishes how the employer cannot escape his/her liability if an injury is caused due to negligence within purview of the employer’s business, regardless the employer’s reasonable conduct whatsoever. The ratio decidendi of this instant judgement highly relies on the benefits of the employees, suffering loss and/or damage and/or injury cause by and during their

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2. Quintin Johnstone ,Oregon Law Review; “THE USE OF EXTRINSIC AIDS TO STATUTORY CONSTRUCTION IN OREGON” accessed on 29th April, 2021
3. All Answers ltd, 'English Law Rules For Statutory Interpretation' (Lawteacher.net, April 2021) accessed 29th April 2021

employer’s course of business and that set further precedent where the employer is bound to take precautions, outside of their reasonable conduct and suspicion to safeguard their employees properly.

What is “money laundering” and explain why solicitors are at risk in their professional practice? Give an example of how a criminal could use a solicitor to “launder” money. [25%]

The term ‘Money Laundering’ can be defined as the illegal procedure to conceal the origin of a large amount of money acquired from any criminal activity such as drug trafficking and/or terrorist funding , by circulating the same through several bank accounts or commercial transactions. In simple words, money laundering is the process of return ‘clean’ money to the launderer through a scheme of several legal transactions.

Solicitors are one of the weakest targets in the sector of money laundering because the ethical client confidentiality can often trick solicitors in allowing the money launderers to use their accounts in transactional work which in turn provides legitimacy to the ‘dirty’ money. Also, solicitors act as a ‘professional enables’ for the money launderers and they can risk their professional practice if they don’t have robust anti money laundering policies.

A money launderer can easily ask away his/her solicitor to do a commercial transaction on their behalf wherein the source of the original money is always cash in hand. This way the solicitors provides legal confirmation to money launderers dirty money and act as a professional enablers.

What information in the scenario makes you feel suspicious about Gerald Rush and what he has instructed Natalia Mackenzie to do? Are there any “warning signs”? [25%]

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4. Institute of Financial Accountants post, ‘Anti-Money Laundering’ accessed on 29th April, 2021

In the above referred scenario, Gerald Rush contacts Natalie Mackenzie, a solicitor of Smithson Legal, and asks her to make a purchase of a building on his behalf and the same was demanded by Gerald Rush to be completed within a very short period of time. Also, Gerald Rush informs Natalie Mackenzie about how he has the money for the purpose of purchasing the same in cash and he intends to use Smithson Legal’s bank account for the same as well.

The crux of suspicion herein lies with the fact that Gerald Rush wants to make a purchase with a huge amount of money that he has in cash. According to Money Laundering Regulation, 2017, the circumstance where Gerald Rush intends to use Smithson Legal’s bank account to make the abovementioned purchase is a warning sign as through this scheme of bank transaction, his laundered money will be ‘clean’ and if traced back; no one will be point a finger of suspicion to Gerald Rush as well.

Also, there are other several warning signs as well such as – the fishy background story Gerald Rush provides where he explains how the money comes from an accused person, the plan of Gerald Rush to go on a vacation soon after purchasing the building etc.

If Natalia decides to act for Gerald Rush on this transaction what offences could she potentially commit? [50%]

If Natalie decides to act for Gerald Rush as has been mentioned in the above referred scenario, she would be an active accomplish of the money laundering and the criminal activity adjacent to the acquired illegal money and also she could be booked for violation of regulation 10.2(b)(vii)

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5. Solicitors Authority Regulation, ‘Standards and Regulations Sources’ accessed on 29th April, 2021
6. FATF Report, ‘Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals’, published on June, 2013 accessed on 29th April, 2021

of the SRA Authorisation of Individuals Regulations and several other regulations under the Money Laundering Regulation, 2017 herein.

However, it is whatsoever challenging in nature to criminally prosecute a solicitor under the abovementioned scenario as legal professionals pose a greater risk of ML/TF. Although, in the abovementioned case with the suspicious information provided by Gerald Rush to Natalie Mackenzie, it would not be hard to procure a search warrant to seize necessary documents and book Natalie an accomplish to the said money laundering case.

Also, Natalie will commit a huge violation of several SRA Disciplinary Procedure Rules, 2010 where the Authority of SRA can take disciplinary actions against Natalie and exercise necessary powers under section 44D of the Solicitors Act, 1974 which provides SRA with extensive power to give Natalie a written rebuke and/or impose a penalty on her, which shall not exceed £2,000. Further, the SRA shall reserve the right to publish the details of any such action as has been mentioned above under subsection 2(a) or (b) of section 44D of the Solicitors Act, 1974, if it fits to be within the ambit of public interest. Dig deeper into Addressing Ship Arrest and Multifaceted Maritime Claims with our selection of articles.



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7. Solicitors Regulation Authority, ‘SRA Authorisation of Individuals Regulations’ accessed on 29th April, 2021
8. FATF Report, ‘Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals’, published on June, 2013 accessed on 29th April, 2021
9. Andrew Boon, ‘The Ethics and Conduct of Lawyers in England and Wales’ (3rd edn, Hart Publishing, 2014)

BIBLIOGRAPHY

Book

Boon A., ‘The Ethics and Conduct of Lawyers in England and Wales’ (3rd edn, Hart Publishing, 2014)

Journal

Quintin Johnstone Oregon Law Review; “THE USE OF EXTRINSIC AIDS TO STATUTORY CONSTRUCTION IN OREGON “ accessed on 29th April, 2021

Website

'The Golden Rule of Statutory Interpretation' (Lawteacher.net, April 2021) accessed 29th April 2021

All Answers ltd, 'English Law Rules For Statutory Interpretation' (Lawteacher.net, April 2021) accessed 29th April 2021

Institute of Financial Accountants post, ‘Anti-Money Laundering’ accessed on 29th April, 2021

Solicitors Authority Regulation, ‘Standards and Regulations Sources’ accessed on 29th April, 2021

FATF Report, ‘Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals’, published on June, 2013 accessed on 29th April, 2021

Solicitors Regulation Authority, ‘SRA Authorisation of Individuals Regulations’ accessed on 29th April, 2021

FATF Report, ‘Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals’, published on June, 2013 accessed on 29th April, 2021