4 ms·

I'm conflicted about this. On one hand, there's a part of me that likes the fact they're sticking it to a bank. On the other hand, are we benefitting as a socie

I'm conflicted about this. On one hand, there's a part of me that likes the fact they're sticking it to a bank. On the other hand, are we benefitting as a society because of this?

dangerlibrary 11y ago
Hoping for benefits of the stock market that aren't captured by businesses or investors is a good definition of 'picking through scraps.'
SEMW 11y ago
> are we benefitting as a society because of this? Arguably yes, though indirectly: society benefits from having a legal system that upholds contracts, even if one of the parties later changes their mind. Or to put it another way - the harm to society of enforcing a ruinously bad bargain against one bank is possibly less than the harm that would be caused by the precedent that banks can sometimes wiggle out of bad bargains they make.
- peteretep 11y ago
  Maybe. Certainly in the UK there are many cases where "unfair" contracts can't be enforced, though, which presumably stays as law because it is seen to be beneficial.
  - jessaustin 11y ago
    Beneficial to whom? I won't pretend to know anything about the UK, but in those places I've lived, any time the law gets "complicated", it's because someone wealthy has an interest in it being so.
    - SEMW 11y ago
      Would you mind having a read of, say, UTCCR[0] and let me know what wealthy interests you believe it serves? Here's the text: http://www.legislation.gov.uk/uksi/1999/2083/made http://www.legislation.gov.uk/uksi/1999/2083/made . As far as I can tell its effect is to tilt the balance strictly in favour of the consumer, but I'd be interested if you see something I don't.
      - jessaustin 11y ago
        I hesitate to comment on another nation's laws, because if it works for them I'm glad (motes and beams, etc.), but ISTM "shall not be binding upon the consumer" understates a great deal of legal procedure, nearly all of which would be increased business for the tort bar. (Which, again, may be less of a problem for other nations than it is for us.) If 100 consumers feel a contract term is unfair and so decline to meet their obligations, the firm will file a suit against e.g. the 20 least likely ones to contest rather than settle, which is good for the firm's attorneys (or is it barristers?). Etc. Eventually a consumer will contest the suit under the provisions of this law. That will entail more court business. In anticipation of this rigmarole, this law was probably a great one-time boost for those who rewrite contracts for purposes of risk-management. It certainly wasn't welcomed by small shopkeepers who enter into relatively simple contracts with their customers (e.g. to purchase an expensive item on terms). To compensate, such firms might have told their customers "the new law means it doesn't matter what's on the contract". Although untrue, that statement would be plausible enough to generate more sales, at least until consumers heard enough stories about court cases that they no longer believed it. Certainly there are consumers who have been helped by this law, but there are probably others who have been disappointed by it.
  - SEMW 11y ago
    > Certainly in the UK there are many cases where "unfair" contracts can't be enforced AFAIK there's no unfairness provisions in common law. There are two statutes about unfair clauses - UCTA (Unfair Contract Terms Act 1977) and UTCCR (Unfair Terms in Consumer Contracts Regulations 1999, the UK implementation of an EU directive). Both are mainly focused on limiting businesses trying to enforce unfair terms on consumers. UCTA limits itself to specific types terms (liability limitations etc). UTCCR is much wider in the types of terms it covers, but still only applies to 'standard form' contracts (ie not-individually-negotiated terms), and only to terms which are unfair "to the detriment of the consumer". Ie none of them will help a bank trying to claim that one of its own standard form contracts were unfair to the bank! Edit: If you just meant that that the existence of this sort of legislation undermines my 'certainty of contracts' point, I disagree. For one thing, even the more-powerful UTCCR explicitly bans the core terms of the contract (ie how much it costs and what you're getting for your money) from being considered 'unfair' -- it doesn't try to judge whether a bargain is good or bad. For another, there's a hell of a difference between the law choosing not to enforce a term in a standard form against a consumer who probably didn't read and certainly couldn't have negotiated it, and someone objecting to a term they did write/negotiate - i.e. either an individually negotiated term or, as here, a bank objecting to a standard form term it wrote itself.
chasing 11y ago
Rich guy gets deal only offered to the rich that allows them to go from merely rich to extravagantly rich while contributing nothing to society. And it happens to be legal! If we were talking about a Wall Street financial predator, people would be squealing for change. In fact, they have been. But this guy seems to get a pass for "sticking it to the man" or something. It's weird.
- jerf 11y ago
  'Cause it is "sticking it to the man". The Rich taking from the Rich is not a populist story.
  - chasing 11y ago
    My understanding is that Aviva provides life insurance and pensions to millions of people. If they were to go under, many non-rich people would suffer greatly. Just so this one already rich guy could further "stick it to the man."
    - jerf 11y ago
      Contrary to popular belief, this is true about many rich people. Rich people, in general, are not sitting on piles of cash or extremely liquid assets that could simply be "taken" from them with no impact on anyone else. Taking away businesses, taking away capital, taking away their ability to capitalize on the human networks they've formed in some industry turns out to hurt the body politic as well. It's why none of the large-scale efforts to confiscate wealth that have happened in the real world (most recently Venezuela for one example) ever seem to be going so well five or ten years later, once the first party has ended... removing capital from the people who know how to utilize it is not exactly a great deal for society. Yes, "rich" people can get there "unfairly", but it turns out "just take it from them" is really a stupid idea. So as to not fit too clearly into a "capitalist" mold, note this line of argumentation argues that such rich people shouldn't be able to simply pass this wealth down to their children, unless perhaps their children demonstrate similar facility with using it to their and society's mutual benefit. (Legalizing that would be tricky as well, but at least conceptually it could be argued.)
CPLX 11y ago
As the article mentions things like insurance and long term investments, annuities, stock certificates, and the like, are the ones where it makes the most sense to be the most exacting in enforcing contract terms. That's essentially the nature of the business, and in a world where people can hedge two massive sums of money against each other for hundredths of a percent gains and so on, it does make sense for the financial system to decide that this level of precision should be considered inviolate. There is precedent for the argument that very long term arrangements (sometimes called "Methuselah Trusts"[0]) involving compounding interest should be prohibited or changeable in some circumstances but the lifetime of a single person would really never fall into that category. Also of note in this specific instance, the "error" on the banks part is not a case of overlooked fine print, obliviousness to an extreme edge case situation that seems highly implausible, or a customer acting in somewhat bad faith or wastefully, which you could argue gifting first class tickets to random strangers is. In this instance the whole point of the investment was to allow wealthy purchasers to make backward looking adjustments to a held investment portfolio. Which is, in fact, exactly what has happened. [0] http://www.nickbaily.com/nick_bailys_002/2015/01/the-dangers-of-compound-interest.html http://www.nickbaily.com/nick_bailys_002/2015/01/the-dangers...

I'm conflicted about this. On one hand, there's a part of me that likes the fact they're sticking it to a bank. On the other hand, are we benefitting as a society because of this?

dangerlibrary 11y ago

Hoping for benefits of the stock market that aren't captured by businesses or investors is a good definition of 'picking through scraps.'

SEMW 11y ago

> are we benefitting as a society because of this? Arguably yes, though indirectly: society benefits from having a legal system that upholds contracts, even if one of the parties later changes their mind. Or to put it another way - the harm to society of enforcing a ruinously bad bargain against one bank is possibly less than the harm that would be caused by the precedent that banks can sometimes wiggle out of bad bargains they make.

peteretep 11y ago
Maybe. Certainly in the UK there are many cases where "unfair" contracts can't be enforced, though, which presumably stays as law because it is seen to be beneficial.
- jessaustin 11y ago
  Beneficial to whom? I won't pretend to know anything about the UK, but in those places I've lived, any time the law gets "complicated", it's because someone wealthy has an interest in it being so.
  - SEMW 11y ago
    Would you mind having a read of, say, UTCCR[0] and let me know what wealthy interests you believe it serves? Here's the text: http://www.legislation.gov.uk/uksi/1999/2083/made http://www.legislation.gov.uk/uksi/1999/2083/made . As far as I can tell its effect is to tilt the balance strictly in favour of the consumer, but I'd be interested if you see something I don't.
    - jessaustin 11y ago
      I hesitate to comment on another nation's laws, because if it works for them I'm glad (motes and beams, etc.), but ISTM "shall not be binding upon the consumer" understates a great deal of legal procedure, nearly all of which would be increased business for the tort bar. (Which, again, may be less of a problem for other nations than it is for us.) If 100 consumers feel a contract term is unfair and so decline to meet their obligations, the firm will file a suit against e.g. the 20 least likely ones to contest rather than settle, which is good for the firm's attorneys (or is it barristers?). Etc. Eventually a consumer will contest the suit under the provisions of this law. That will entail more court business. In anticipation of this rigmarole, this law was probably a great one-time boost for those who rewrite contracts for purposes of risk-management. It certainly wasn't welcomed by small shopkeepers who enter into relatively simple contracts with their customers (e.g. to purchase an expensive item on terms). To compensate, such firms might have told their customers "the new law means it doesn't matter what's on the contract". Although untrue, that statement would be plausible enough to generate more sales, at least until consumers heard enough stories about court cases that they no longer believed it. Certainly there are consumers who have been helped by this law, but there are probably others who have been disappointed by it.
- SEMW 11y ago
  > Certainly in the UK there are many cases where "unfair" contracts can't be enforced AFAIK there's no unfairness provisions in common law. There are two statutes about unfair clauses - UCTA (Unfair Contract Terms Act 1977) and UTCCR (Unfair Terms in Consumer Contracts Regulations 1999, the UK implementation of an EU directive). Both are mainly focused on limiting businesses trying to enforce unfair terms on consumers. UCTA limits itself to specific types terms (liability limitations etc). UTCCR is much wider in the types of terms it covers, but still only applies to 'standard form' contracts (ie not-individually-negotiated terms), and only to terms which are unfair "to the detriment of the consumer". Ie none of them will help a bank trying to claim that one of its own standard form contracts were unfair to the bank! Edit: If you just meant that that the existence of this sort of legislation undermines my 'certainty of contracts' point, I disagree. For one thing, even the more-powerful UTCCR explicitly bans the core terms of the contract (ie how much it costs and what you're getting for your money) from being considered 'unfair' -- it doesn't try to judge whether a bargain is good or bad. For another, there's a hell of a difference between the law choosing not to enforce a term in a standard form against a consumer who probably didn't read and certainly couldn't have negotiated it, and someone objecting to a term they did write/negotiate - i.e. either an individually negotiated term or, as here, a bank objecting to a standard form term it wrote itself.

chasing 11y ago

Rich guy gets deal only offered to the rich that allows them to go from merely rich to extravagantly rich while contributing nothing to society. And it happens to be legal! If we were talking about a Wall Street financial predator, people would be squealing for change. In fact, they have been. But this guy seems to get a pass for "sticking it to the man" or something. It's weird.

jerf 11y ago
'Cause it is "sticking it to the man". The Rich taking from the Rich is not a populist story.
- chasing 11y ago
  My understanding is that Aviva provides life insurance and pensions to millions of people. If they were to go under, many non-rich people would suffer greatly. Just so this one already rich guy could further "stick it to the man."
  - jerf 11y ago
    Contrary to popular belief, this is true about many rich people. Rich people, in general, are not sitting on piles of cash or extremely liquid assets that could simply be "taken" from them with no impact on anyone else. Taking away businesses, taking away capital, taking away their ability to capitalize on the human networks they've formed in some industry turns out to hurt the body politic as well. It's why none of the large-scale efforts to confiscate wealth that have happened in the real world (most recently Venezuela for one example) ever seem to be going so well five or ten years later, once the first party has ended... removing capital from the people who know how to utilize it is not exactly a great deal for society. Yes, "rich" people can get there "unfairly", but it turns out "just take it from them" is really a stupid idea. So as to not fit too clearly into a "capitalist" mold, note this line of argumentation argues that such rich people shouldn't be able to simply pass this wealth down to their children, unless perhaps their children demonstrate similar facility with using it to their and society's mutual benefit. (Legalizing that would be tricky as well, but at least conceptually it could be argued.)

CPLX 11y ago

As the article mentions things like insurance and long term investments, annuities, stock certificates, and the like, are the ones where it makes the most sense to be the most exacting in enforcing contract terms. That's essentially the nature of the business, and in a world where people can hedge two massive sums of money against each other for hundredths of a percent gains and so on, it does make sense for the financial system to decide that this level of precision should be considered inviolate. There is precedent for the argument that very long term arrangements (sometimes called "Methuselah Trusts"[0]) involving compounding interest should be prohibited or changeable in some circumstances but the lifetime of a single person would really never fall into that category. Also of note in this specific instance, the "error" on the banks part is not a case of overlooked fine print, obliviousness to an extreme edge case situation that seems highly implausible, or a customer acting in somewhat bad faith or wastefully, which you could argue gifting first class tickets to random strangers is. In this instance the whole point of the investment was to allow wealthy purchasers to make backward looking adjustments to a held investment portfolio. Which is, in fact, exactly what has happened. [0] http://www.nickbaily.com/nick_bailys_002/2015/01/the-dangers-of-compound-interest.html http://www.nickbaily.com/nick_bailys_002/2015/01/the-dangers...