Author: Andre Coleman

Key marketing issues facing HSBC Bank in the United Kingdom and globally: How it can be improved for entering in to 2011

Abstract

Today’s global banking environment is highly volatile, but this does not hinder competition from being intense. Consequently, organisations such as HSBC Bank plc, “the world’s local bank”, need to align their marketing strategies to improve on their brand value and positioning. To enter into the year 2011, they need to address both internal and external environment(s) which inevitably affect their competitive advantage, positioning and performance.

In the following, the researcher aims to explore these avenues with the view to propose an extended study on new strategies to improve upon HSBC’s current standing.

Table of contents

Chapter 1: Introduction

Chapter 2: Methodology

Chapter 3: Literature Review

Chapter 4: Evidence

Chapter 5: Conclusion and Recommendations

References

Appendices

Introduction

In the last few years, the banking industry has undergone tremendous change in the face of global transformation. As a result, executives are finding it difficult to meet competitive challenges as the pressure to become global intensifies. HSBC Bank plc, headquartered in United Kingdom, is a global business which faces the same challenge and is being investigated in the following dissertation. The aim is to survey the key marketing issues that challenge the bank, in the UK and globally so that the researcher could further its study in developing solutions for the same. Some of the objectives that the researcher aims to achieve in this dissertation proposal are as follows:

Objectives

1. To explore key external and internal environments to address major issues that plague HSBC to function successfully as a global bank.

2. To identify the marketing mix that should be adopted to be integrated in the bank’s marketing and competitive strategies.

3. To investigate organisational functions like MIS (Management Information System) and CRM (Customer Relationship Management) to align them with the market structure.

4. To evaluate the brand value at HSBC, and perhaps identify new strategies for improving its global positioning.

Background

Today, change catalysts are being integrated by major consolidated organisations to adapt and become flexible to the changing needs of consumers. The banking industry, likewise, has been following the same trend of consolidation through mergers and acquisitions (M&A), despite the fact that these M&As are creating even more complex organisations. This can be gauged from HSBC’s organisational spread. HSBC has over 100 million customer base, spread across the globe through its Customer and Global businesses. With 9,500 offices and 335,000 staff in 85 countries and territories, it is considered to be one of the world’s top financial brands by The Banker Magazine (HSBC Official Web site 2008). While it is regulated by the Financial Services Authority in the UK, the global nature of its operation subjects it to be regulated by 510 central banks and authorities around the world as well (HSBC Official Web site 2008). To ensure that HSBC meets global challenges, the bank has been constantly evolving its strategy. For the past decade, it has focussed on being “the world’s local bank” with a wide network spread to mostly international emerging markets to develop unique cosmopolitan customer base to strengthen its financial standing. The four key business areas – private banking, commercial banking, personal financial services and global banking markets – help HSBC to align its presence with global trends such as fast growing emerging markets, world trade, and longevity in business (See Appendix 1). In line with this focus, is the strategy to leverage brand and network to increase revenues and maximise efficiency (HSBC Official Web site 2008).

This conservative positioning strategy had been adopted for the past decade and has paid off in terms of higher earnings, and improved performance (BBC 2001). However, recently there has been a fall in profit earning (UK Annual Report 2007)(See Appendix 2), which has been translated to low performance. Some of the factors that have afflicted the bank include inflation in developed markets; slow down in emerging economies; and the ongoing credit crunch, especially in the UK and neighbouring Europe (HSBC Annual Results 2007; “Toxic Shock” 2008). The growing importance of globalisation only emphasises on the need for integrating marketing strategies within competitive strategies to leverage future performance. According to a Deloitte report (2007), banks like HSBC, with a global focus, need to understand external and internal factors that affect them, in order to devise comprehensive competitive strategy. While experts (Dietz, Reibestein, and Walter 2008) predict growth in global banking revenues estimated at 7 to 8 percent from 2006 to 2016, how to harness this forecast is dependent on the individual firms’ strategy. For this purpose, HSBC need to revise its strategic orientation.

The purpose of research is to gain new knowledge through logical and systematic methods. According to Smith (1981 qt. Gliner and Morgan 2000), research is a broad discipline which must be carefully examined before adopting methods for evaluation. Whether the researcher chooses the naturalistic, experimental, survey or historical methods, the choice should be consistent with the inquiry defined. Accordingly, research approaches in the social science discipline can be divided into the positivist or quantitative, and constructivist or qualitative approach (Mangan, Lalwani and Gardner 2004). Depending on the quantitative or qualitative paradigm, a researcher must choose the approach of research. A quantitative paradigm is associated with scientific methods in acquiring research results and identifies causal relationships (Phillips 1992; Lincoln and Guba 1985 qt. Gliner and Morgan 2000). On the other hand, the qualitative approach is a constructivist approach that studies humans and physical objects with the meanings inherent in their social roles and symbolism. Considering the qualitative nature of the topic, the researcher proposes to adopt a constructivist approach which would be more appropriate in exploring the issues that affect HSBC. This is a logical proposition as it would allow the researcher to predict the causes and market behaviour based on theoretical frameworks studied through comprehensive literature review, a gist of which shall be explored in the next section. Furthermore, the researcher proposes this choice of research approach based on the premise that social science researches often seek to predict and control (Bryman 1995). Research questions raised are often open-ended and encompass extensive avenues before decisions can be made. Therefore, a qualitative method shall be suitable for the study of key issues challenging HSBC in the future.

To take a brief overview of banking, the researcher has carried out a brief literature review to study the issues that surround the organisation. In the following section, the researcher shall explore the current market environment, as well as attempt to understand it through theoretical frameworks.

Banking Industry

As the world’s banking industry globalises and consolidates, cross border investment barriers have fallen to give way to new and volatile markets. To serve evolving markets, banks have been observed to develop new competitive strategies that capitalise on operations, resources and functionality, and serve new types of customers. The challenge for banks today is the geopolitical risks and structural market challenges which they need to adapt to, for addressing international compliance of standards, demographic shifts, and developing relationships with customers. The diversified nature of the banking environment makes it difficult for global organisations, like HSBC, to focus. A global bank can be defined as having the widest reach in providing services to affiliates, while a local bank has narrower reach in provision of services to institutions in the country. Some of the challenges that affect these organizations are explored below:

1) External Environment

The basic premise for gaining competitive advantage in a global environment according to experts like Porter (1990) and Weihrich (1982), is through formulation of strategies that reflect the conceptual framework of the TOWS Matrix (See Appendix 3). The TOWS (Threats, Opportunities, Weaknesses and Strengths) Matrix is a systematic analysis model which identifies factors that surround the industry, and, thereafter, help identify solutions by maximising opportunities and strengths. By identifying the competitive advantage against competitors, the industry or firm can maximise the attributes it posses at the international level. These competitive advantages can be factor conditions such as skilled labour or infrastructure; demand conditions such as demand of the product or service; related and supporting industries; and firm strategy, structure and rivalry (Porter 1990). However, critics are of the view that Porter’s formula does not provide the key to success (O’Shaughnessy 1996) as it does not address operational and environmental issues like culture, competitive advantage in emerging markets; political and national history; or role of government. In today’s global banking environment, these issues play critical roles (Jones 2005). These are evident from the Deloitte report (2007) on key issues challenging the banking industry, which include off-shoring; local insights for global branching; cost-reduction; emergence of hedge funds; and complex anti-money laundering regulations (Deloitte 2007). Not only is the global business environment of today strived with uncertainty due to emerging markets’ participation (Fahy 1993; Bansal and Penza 2000), but also the technological, political and regulatory environments have heightened competition.

In the past decade, HSBC has focussed its competitive strategy on Europe after the slow down in Asia-Pacific region. Europe is an ideal setting for international integration based on a single market program (Berger, Smith, and Judge 2003; HSBC 2008). There are, however, issues that hinder development and competition including loyalty to local banks, regulatory restrictions, demand for global banking services, and technological advancement of banks. As a result, HSBC needs to rethink its current strategy.

2) Internal Environment

As a result of the above factors, the internal environment of global banks has to be revolutionised. At the forefront is the adage “the customer is king”. Global banks are changing their strategies to alter banking environment congruent to customer’s needs, rights and choices. Services and products are tailored to the living conditions and customer patterns of banking use. These conditions set off alternative marketing strategies that emphasise on individuality and relationship building. Investment in technology, skills and branch networks, for example, has helped traditional banks to grow and profit from new sources of income (Jayawardhena and Foley 2000). In the UK, especially, the scale of investment in knowledge management and technology has helped transform the banking industry to succinctly harness potential businesses and create advantage for organisations. Learning organisations, however, is still a relatively new concept for many to understand and appreciate its implications (Harris 2002).

Besides the above, global banks are also undergoing structural changes. As more and more banks become global, the traditional role of retail banking has to be revisited. (Bansal and Penza 2000).Issues that affect HSBC like credit and market risks, competence and expertise have come to the forefront, as banks diversify their businesses. For these reasons HSBC needs to be prepared for change management in its internal environment.

3) The Marketing Mix

Given the diversified nature of the global banking industry, Jagersma’s report (2006) suggests that banks need to rethink marketing strategies to meet the challenges in the future by improving customer focus, innovating products, pricing products competitively and organising product information for its strategic positioning. The challenge that awaits organisations is to rethink strategic objectives that would align with the new environment. One approach is to develop a visual identity and develop a communication network to establish relationships with customers. The communication strategy would be the life line for the organisation’s strategy in adapting or changing its market context or other environmental alterations, according to Melewar, Bassett, and Simoes (2006). Similarly, Gummesson (2002) is of the view that relationship marketing is the new approach to marketing that focuses on customer, suppliers and organisations in a complex network environment or society. It is only through these new communication frameworks that the banking sector can address the core and brand values it has to develop for successful marketing mix. (See Appendix 4) HSBC needs to re-evaluate its marketing mix in order to generate newer ones.

4) Market Segmentation and Targeting

Indeed, the nature of the marketing mix is no longer simply the 4 Ps of Price, Product, Position and Promotion but involves complex analysis of the target market and its segments. In fact, Papasolomou and Vrontis (2006) are of the view that today’s banking organisations have different sets of customers and expectations. Customers are no longer limited to the walk-in type, but extend to internal customers such as employees, stakeholders and shareholders; service delivery is not limited to providing service, but extends to standards and expectations; development involves training and development in motivation, and inspiration; and employee incentives. To be successful, organisations must adopt alternative strategies. Market segmentation in the banking industry has changed from niche segments to accumulated customer base of corporate, private or commercial customers, although the principles for targeting them remain the same – customer relationship building; ease of access; delivery of service through diverse workforce; and collaborative banking strategies. As a result, banks like HSBC would need to improve upon customer focus, introduce new ideas to customers and drive aggressive campaigns (“Wells Fargo and First Direct” 2007) using a strong communication network (Berner and Kiley 2005) to build brand image.

5) MIS and CRM

What differentiates and establishes brands depends on the power of the brand to communicate its value to the market. According to Sinek (2008), successful communication is dependent on the bank’s ability to offer different products and services reflective of the customers’ needs. Hence, branding alone would not differentiate banks, but the humanness of the bank’s philosophy would. Thus, Umpqua Bank and FirstDirect’s popularity with customers is due to their understanding of the need for convenient banking, need for alternative products and services, and their understanding of the ever-changing world of banking. By harnessing the online banking technology, direct banking has become possible to their customers. The attractiveness of these banks to their customers is inherent in the shift away from traditional transaction-based to customer based banking (“Branching out” 2007).

Furthermore, banks have also capitalised on technological networks to expand globally to bring customers closer to their banks by defying geographical dispersion (Lefton 1997; Branching out 2007). However, in the process, issues like outsourcing labour to foreign regions, which are alien to the customers, and low quality service delivery compromise the overall expectations. Banks, especially, rely on outsourcing companies for their customer service which constitutes a major part of their service/product delivery (Gottfredson and Phillips 2005). This reliance on external organisations for the bank’s success is volatile and, at times, detrimental to its relationship with customers. Whether HSBC should rely on these systems or not shall determine its performance in the future.

6) Brand Positioning

The objective of competitive advantage is dependent on positioning of the product. A firm’s communication strategy and its effectiveness depend on the positioning strategies. In marketing strategies for service-oriented brands, positioning is even more critical as it modifies the intangible perceptions of the service in relation to the competition (Blankson and Kalafatis 2007). For these reasons, strategic implications of brand positioning are critical for the organisation’s competitive strategy. Service positioning differs from tangible product positioning as its characteristics are different from physical goods. Customers differentiate the service from goods through communication, standard of service delivery, and the quality of the benefits reaped. Thus, marketing communication plays a vital role in establishing the marketing positioning of brands. Consequently, Papasolomou and Vrantis (2006) emphasise on the importance of internal marketing throughout branch network to strengthen relationship marketing and the brand. In banking, this could be achieved by launching internal marketing campaigns to sustain the brand through employees and their experiences such as brand proposition, overcoming internal barriers, continual improvement and expansion. These HSBC needs to explore in to incorporate into its future strategies.

From the above brief literature review, the researcher is of the view that HSBC, as a global bank, faces tremendous challenges in the near future to improve upon its marketing strategy. The above literature also suggests that, while the current marketing strategy has been successful in launching the HSBC in the international market, the bank needs to revise and develop its marketing strategies which would sustain HSBC in global environment. Issues that plague the world’s global banking industry need to be evaluated in the future study to understand the extent and breadth to which HSBC has complied with, before competitive strategies can be evaluated.

The brief literature review also indicates that today’s marketing strategies are different from traditional methods adopted, especially for a service-oriented organisation. Consequently, marketing strategies for HSBC needs to be re-valuated to gauge its future performance, and perhaps devise new ones to address current and future issues. Issues like MIS, CRM, brand positioning and marketing mix shall be revisited in this extended dissertation in order to tackle the issues that plague its internal and external environment.

From the above evidence, the researcher proposes an extended study in the form of a dissertation to review HSBC’s performance and how it can improve upon its current marketing strategy in order to develop an integrative competitive strategy for the future. Considering the fast-paced and highly volatile banking environment of the UK and globally, HSBC needs to improve its performance in order to sustain competition. With the extended study, the researcher hopes to achieve the following objectives:

a. A detailed investigation of the external and internal environment of HSBC in order to identify its strengths, weaknesses, opportunities and threats.

b. Identify the marketing mix that it should adopt and integrate within its organizational strategies to enter into 2011.

c. To study the current organisational function such as MIS and CRM to the advantage of HSBC and integrate into its future marketing strategies.

d. Improve on its current brand value and global positioning.

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Appendix 1

Appendix 2

Appendix 3

Appendix 4

A beneficiary under a trust is a volunteer unless he has provided valuable consideration.^[1] Where a gift is made, the beneficiary will always be a volunteer as it is by definition made without consideration. The traditional equitable maxim is that equity will not assist a volunteer.^[2] This generally means that where a gift is made imperfectly, equity will not enable the intended beneficiary to claim the gift under a trust. However, there are exceptions to the rule. This essay will consider these exceptions and the extent to which the rule has developed from “equity will not assist a volunteer” to a position of “equity will not assist a volunteer if, in doing so, it would repair the consequences of a would-be donor’s folly”.

The leading case in this area is Milroy v Lord^[3] where a voluntary deed which purported to assign 50 shares to Samuel Lord on trust for Milroy. Lord was already acting as Milroy’s agent under a power of attorney. The formalities of the share transfer were not complied with. Milroy therefore sought to establish that a trust had been declared. It was held that an ineffective transfer does not constitute a declaration of trust without there being a clear intention to create a trust. Furthermore, if a voluntary settlement is to be valid and effectual, the settlor must have done everything which was necessary to be done to transfer the property and render the settlement binding upon him.^[4] As the shares had not been transferred, no trust was created and no gift made.

The case of Milroy v Lord thus provides that for the settlement to be binding there must be either an outright transfer, a declaration of self as trustee, or a transfer of property to a third party as trustee.

The facts of Jones v Lock^[5] were that a father produced a cheque payable to himself and said “Look you here, I give this to baby; it is for himself” and placed the cheque in the baby’s hand. He then took the cheque back stating that he was going to put it away for him. It was held that there had been no effective gift because no valid transfer had occurred. Moreover, it was held that a failed gift cannot be construed to be a valid declaration of trust. It was said that the crucial principle is that an owner must not be deprived of his property unless, by making a valid gift or trust, he has demonstrated the seriousness of his intention to dispose of the benefit of his property.^[6]

However, where the property is vested in the trustees in circumstances outside their capacity as trustees, the trust may be constituted, even though the beneficiaries are volunteers^[7] (Re Ralli’s Will Trusts^[8]). Other exceptions include the rule in Strong v Bird^[9] and Donationes Mortis Causa. As these exceptions are uncommon, the main exception and development as set out below will be the focus of this piece.

The case of Re Rose^[10] demonstrates the principle that where a donor has done everything they can to transfer title to another but that outright trust has not been completed, an equitable interest will have passed, even where the donee is a volunteer.^[11] This principle is therefore an exception to the general rule that equity will not assist a volunteer and is based upon the inequity of reneging on a promise once the donor has purported to transfer title by doing everything necessary for him to do.

The principle in Re Rose has recently been extended. In T Choithram International SA v Pagarani,^[12] a man lying on his deathbed sought to declare an inter vivos trust over his property. The settlor’s intention was to become one of nine trustees, but he failed to transfer legal title to all nine trustees and as a consequence, under the ordinary law of trusts, the trust would not have been validly constituted. The Court of Appeal thus held that he had neither effectively vested the property in the trustees, nor did his words of gift render him a trustee. Furthermore “the court will not give a benevolent construction so as to treat ineffective words of outright gift as taking effect as if the donor had declared himself a trustee for the donee”. In the words of Hopkins, the Court of Appeal decided the matter on the basis that “equity will not assist a volunteer” or “perfect an imperfect gift”.^[13]

In allowing the appeal, the Privy Council accepted the maxims but added that “equity will not strive officiously to defeat a gift”. The reasoning for holding a trust was that the settlor had done all that was necessary to constitute a trust, by declaring himself as trustee. His words that he would ‘give’ could only then mean “I give to the trustees of the foundation trust deed to be held by them on the trusts of the foundation trust deed”.^[14]

The case of Choithram may therefore be taken to be support for Hopkins’ statement that that the courts have left behind the well-known equitable maxim “equity will not assist a volunteer” and have reframed it as “equity will not assist a volunteer if, in doing so, it would repair the consequences of a would-be donor’s folly.” This is because, in both Re Rose and Choithram there was no folly in the sense that the donor had not done all that was necessary and therefore, on the basis of the reformulated maxim the trusts were rightly held. Conversely, in both Jones v Lock and Milroy v Lord, the donor had not done all that was necessary, and was therefore acting in folly.

However, this is not the end of the developments. In Pennington v Waine^[15] A owned 1500 of the 2000 shares in C Ltd. She instructed P, a partner in C Ltd auditors, that she wished to transfer 400 shares to her nephew H and that he was to become a director. A signed the share and P placed it “on the company’s file”. A made her will a short time later bequeathing the rest of her shareholding but making no mention of the 400 shares transferred to H.

Under the traditional law, as seen above, the gift would have been complete only once the signed stock transfer form and the share certificate had been handed to the donee. The Court of Appeal in fact held that the gift was to be regarded as completely constituted, despite the lack of delivery and the fact that there was apparently nothing to stop A from recalling her gift.^[16]

The Court of Appeal followed the maxim as stated in Choithram that equity will not assist a volunteer but will not strive officiously to defeat a gift. It was held that at the time it would be unconscionable for the transferor to be able to change their mind, equity should hold the gift to be properly constituted. Per Arden LJ:

“If one proceeds on the basis that a principle which animates the answer to the question whether an apparently incomplete gift is to be treated as completely constituted is that a donor will not be permitted to change his or her mind if it would be unconscionable, in the eyes of equity, vis-a-vis the donee to do so, what is the position here? There can be no comprehensive list of factors which makes it unconscionable for the donor to change his or her mind: it must depend on the court’s evaluation of all the relevant considerations. What then are the relevant facts here? [A] made the gift of her own free will: there is no finding that she was not competent to do this. She not only told [H] about the gift and signed a form of transfer which she delivered to [P] for him to secure registration: her agent also told [H] that he need take no action. In addition [H] agreed to become a director of the company without limit of time, which he could not do without shares being transferred to him.”

It has been argued that this decision was based on a misunderstanding of the decision in Choithram where it was held that it would be as unconscionable for a settlor who had declared a trust when he was one of a number of trustees to subsequently resile from his declaration as if he had declared himself to be the sole trustee.^[17] Moreover, it is widely accepted that the decision goes much further than previous law.^[18]

Examining Hopkins’ statement in light of this development, it is unlikely that the maxim can be said to be redefined to incorporate the donor’s folly, as the present position appears to leave plenty of scope for assisting a volunteer where doing so would correct a donor’s folly. Indeed, Pennington v Waine may well be overruled in the future, but at present, the most apt re-statement of the maxim is: “equity will not assist a volunteer unless it would be unconscionable not to do so”.^[19]

Bibliography

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Morris, J., “Questions: when is an invalid gift a valid gift? When is an incompletely constituted trust a completely constituted trust? Answer: after the decisions in Choithram and Pennington”, (2003) PCB 393

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Limitations of Research: the researcher could not use all the internet sources because some of them are written in Chinese, the researcher followed the structure that is provided by you but I have noticed that there is repetition in the points that are mentioned in the objectives and the points that are mentioned in the chapter plan, also there is a repetition in the resources that are mentioned in the data and information needs and the points in relevant literature consulted.

The researcher shall bear no responsibility for any confusion caused by the un-clarity of the attached document.

Introduction:

More than 120 countries have imposed Goods and Services Tax, the only developed country that has not imposed this tax is Hong Kong.

VAT or GST has been introduced by France in 1954(Ministry of Economy, Finance and Industry).

All the developed countries (except Hong Kong) and most of the developing countries have followed France in imposing VAT/GST because this tax is considered:

Fair: VAT/GST is considered a fair tax because it relates the amount of collected tax to the amount of consumption; the more you consume, the more you pay VAT.
Simplicity: unlike any other taxes, VAT/GST is considered a straightforward tax; it is imposed according to a known percentage on the value of the products and services
Efficiency: this tax is very efficient, it is very easy to collect it and it is very difficult to avoid it.

Chapter2: Objectives:

The purpose of this research is to find out whether VAT/GST is a suitable tax for Hong Kong or not.

The research has covered very large material and literature about Hong Kong and similar economies to Hong Kong such as Singapore.

The research also aimed to show that most of the governments of the world are broadening their budgets by imposing VAT/GST on customers while they are trying to reduce income and corporate taxes.

Chapter3: Literature consulted:

The research has covered a large part of literature published by global accredited organizations such as Price Waterhouse coopers, Ernest Young and the government of Hong Kong.

The major text books have been used to give us a broad idea about the issue in research while the specialized working papers, Internet articles and government websites have been used in order to give us a clear idea about the issue in research.

The research consulted working papers published by several universities and bodies in order to explain the theoretical principles behind imposing VAT/GST (Hubbard,G,R(1997)and the impact of VAT/GST on the informal sector in developed countries.

Chapter4: Proposed Methodology:

we can see from the above chart the deficit that have faced Hong Kong from 1997 until 2003, the revenue was very low compared to the spending which proved to be steady.

”During the same year, about 70% of the total revenue collected by the Inland Revenue Department came from profits tax and salaries tax. Nevertheless, the profits and salaries tax nets are very narrow and shrinking. Less than 40% of our workforce of 3.2 million people pay any salaries tax, and only 10,000 people pay the maximum salaries tax rate of 15%. About 5% of the payers of profits tax contribute to 80% of the profits tax revenue. Further loss of profits could occur as a result of globalisation. Besides, the spread of e-commerce will have implications on all governments’ abilities to assess and collect business-related taxes. In this regard, both the Financial Secretary and the Secretary for the Treasury expressed their concerns on the impact of the exponential growth of e-commerce on Hong Kong’s territorial-based tax system. The Government will set up a Task Force to review public finances and an independent committee on new broad-based taxes”, Wong, J(no date given)

The research has depended on major questionnaire that have been distributed to citizens and companies in Hong Kong in order to get their opinion about VAT/GST tax.

The response that I have got from this questionnaire has been used in predicting the change in consumption behavior by the citizens of Hong Kong.

The research has also depended on comparative analysis in order to see how Hong Kong economy will be affected and how the whole tax system will be redesigned.

The research depended on some graphs to illustrate the topic further.

Chapter5: Data and Information needs and sources:

This research needs theortical as well as practical data and comparative analysis.

This research is different because it assesses the potential of something that might happen in the future.

The researcher has conducted a questionnaire in order to measure the acceptance of the people to VAT and their views about the fiscal position of their country.

The researcher tried to make sure that the sample is random, so the results are random too and not biased.

The research required me to use some theoretical concepts in order to assess the impact of VAT.

The research also depended on comparative analysis in order to see what happened to similar economies that have implemented VAT/GST.

Chapter6: Chapter Plan:

Understanding the principles behind using an expenditure tax like GST/VAT:

Definition of GST:

Goods and Services tax is imposed on:

Goods and Services tax is broad-based and equitable and is capable of yielding sizeable and steady revenues.

VAT or GST is a consumption tax, it is paid by the consumer of the product or the service as a percentage of the final price.

It is related to all commercial activities involving the production and distribution of services; it is not charged on companies which mean that companies can deduct from their VAT liabilities the amount of tax they have paid to other taxable persons on purchases for their business activities.

Hong Kong government is considering introducing VAT/GST tax in 2009(Hong Kong’s Inland Revenue).

Difference between VAT and Sales Tax:

VAT is imposed on every stage of production while Sales tax is actually collected in the form of extra charge by the retailer, who remits the tax to the government.

VAT and the Theory of Economics:

There have been a long debate between different economic schools of thought around the world about tax reform.

Some economists prefer income tax to VAT/GST because it provides fair treatment to the citizens of the country while others prefer VAT/GST.

According to Hubbard,G,R(1997), some economists support VAT for the following reasons:

Imposing VAT instead of income tax will encourage capital accumulation and savings.
Removing income and profit taxes will remove distortions in the allocation of capital among different economic sectors.
A broad based consumption tax would avoid potential costly distortions of firm’s financial structures.

Importance of VAT:

Today it is a key source of government revenue in over 120 countries. About 4 billion people, 70 percent of the world’s population, now live in countries with a VAT, and it raises about $18 trillion in tax revenue, Liam E., Michael K., Jean-Paul B. and Victoria S(1991)

VAT has advantages and disadvantages:

Disadvantages of imposing VAT:

VAT discourages specialist economic activity and fragmentation in the production because VAT will be fragmented; VAT encourages integration in order to avoid compounded VAT.
VAT encourages financing big governments: in the 1960s, the size of governments in the US and the UK were approximately equal, in the year 2002, the size of the government in Europe have exceeded the size of the US government, many analysts attribute the difference between the sizes of the two governments to VAT, The expansion of the government will lead to higher prices and inefficient production, the thing that will lead to more taxes in the future.

VAT will reduce the available capital to private businesses and raise interest rates, increasing interest rates will stifle economic growth and reduce the potential growth.

Advantages of imposing VAT:

VAT could finance the debt of the government because it provides stable and steady stream of income that is capable of financing development projects.
VAT could reduce consumption and make the citizens of any country save and invest more money.
By encouraging integration, VAT could push the economy towards mergers that will reduce the stages of production; VAT simply tends to encourage big businesses to get bigger by buying other companies, this could yield economies of scale and generate synergies..
Selectivity: the government can select the products and services that it needs to impose VAT on, for example, most government exclude food from VAT, by using VAT governments could take into its consideration the difficult economic situation of the poor and decide the exclusions that apply to them.
VAT is a secure way to finance the government’s structural deficit, VAT covers most of the economic segments in the economy and it is very difficult to evade it.

Introduce a historical background, economy and tax system in Hong Kong:

The Modern History of Hong Kong:

Hong Kong was a British dependency from the 1840s until July 1, 1997, when it passed to Chinese sovereignty as the Hong Kong Special Administrative Region (SAR), Pannell,C(1998).

The British control of Hong Kong began in 1842, when China was forced to cede Hong Kong Island to Great Britain after the First Opium War. In 1984 Great Britain and China signed the Sino-British Joint Declaration, which stipulated that Hong Kong return to Chinese rule in 1997 as a Special Administrative Region (SAR) of China. The Joint Declaration and a Chinese law called the Basic Law, which followed in 1990, provide for the SAR to operate with a high degree of economic autonomy for 50 years beyond 1997, Reference: China Connection.

In the Fifties of the last century, the threat of the cold world was looming over the world.

Investors were looking for a safe heaven to locate their businesses and investments in a neutral place away from the eastern and the western camps, investors found in Hong Kong a promising country that is able to deliver good business environment that could foster growth and political stability at the same time.

Growth in Hong Kong depends on several other economies such as the growth in the US economy and the growth in China and Southeast Asia in general.

Growth in Hong Kong is related to oil prices and world wide prices; Hong Kong is a small island with very little raw resources, it depends on exporting raw materials from abroad in order to manufacture them on its land and re-export them again to other parts of the world.

Manufacturing:

In 1950s, Hong Kong attracted manufacturing jobs and the vast majority of its work force where working in factories.

In 1980s, Hong Kong had about 905,000 manufacturing workers and manufacturing was the most important economic sector, Economist Intelligence Unit (2003).

Until 1990s, Factories were manufacturing products that depended on labour intensive work force, after that manufacturing jobs started dropping because of the climbing costs of labour and land.

In 1990s, the number of manufacturing jobs was about 575,000 jobs.

In 2001, the manufacturing sector contributed to less than 5% of the GDP, Economist Intelligence Unit (2003).

Like most of the developed nations, Manufacturing in Hong Kong is becoming concentrated on manufacturing hi-tech products and services.

The manufacturing sector has been replaced by rapidly expanding service sector, in 1991; the service sector has generated 72.3% of the GDP in Hong Kong and in 2002, the service sector has generated about 83.9% of the GDP, Economist Intelligence Unit (2003).

Services:

A- Banking:

The banking sector is now the most important economic sector in Hong Kong, Hong Kong is currently the fifth largest banking centre in the world.

Hong Kong offered investors a very good opportunity to invest in a growing emerging economy.

Investors benefited from tax free capital gains and high dividends.

B- Tourism:

Tourism is a significant source of economic growth in Hong Kong; nearly 9 million people visit Hong Kong every year, Tourists spend around $7 billion every year.

Tourism is the third source of foreign exchange reserves in Hong Kong.

The banking and the tourism sectors have delivered a very good growth to the Hong Kong economy.

In 1996, Hong Kong’s per capita gross domestic product (GDP) was second to Japan and Singapore in Asia and exceeded that of the United Kingdom, Canada, and Australia, Reference: internet article: Marimari (no date given).

.

Sources of Success:

Hong Kong offered investors business-friendly laws and gave complete freedom to the movement of capital in order to encourage investments and promote growth.

Hong Kong is duty free zone and there are few barriers to trade goods and services; this has made the country an important link ring between the east and the west.

Hong Kong left market forces decide wages and prices; the government did not legislate any minimum wage requirement or anti-trust laws.

Competition in Hong Kong:

The decline of the manufacturing sector has caused the decline of competition in Hong Kong.

Competition is considered an essential part of the market system.

Competition benefits consumers and businesses, it benefits consumer by lowering prices and it benefits businesses by allocating resources in a more efficient ways.

Competition is very important to the health of Hong Kong economy, competition gives world economies the flexibility to adjust its prices in the case of external shock (macro-economic shock) Sturm,P, Jahangir,A, Breuer,P, Nishigaki,Y (2000).

Emerging economies that depend on fixed exchange rates usually suffer from real exchange rate appreciation.

The real exchange rate appreciation could be treated by either:

Switching to a flexible exchange rate: according to the “law of one price” flexible exchange rate will adjust exchange rates in order to make tradable products have the same price everywhere in the world.
Lowering prices: lowering prices of products is an important toll in avoiding international competition, lowering prices could only happen if the structure of the market is competitive.

Having a competitive market structure in lowering prices and keeping international capital flows coming to Hong Kong.

Tax Regime in Hong Kong:

Hong Kong tax regime is based on a territorial-based tax regime; the tax is imposed on incomes that arise from Hong Kong, Hong Kong’ Inland Revenue.

The economy of Hong Kong has gained a competitive advantage because it imposes no taxes on capital gains and dividends; this has encouraged many investors to invest in that country and established an important financial centre in Asia.

Hong Kong has the following simple tax structure:

Property Tax: Property tax is levied on rental income from land and buildings situated in Hong Kong.
Salaries Tax: Salaries tax is imposed on incomes derived from working in Hong Kong or if incomes derived from services rendered from Hong Kong.
Profits Tax: profits that are generated in Hong Kong are subject to taxes, profits of unincorporated business stands at a rate of 15% and corporations at 16.5%.

The relationship between Hong Kong and the foreign exchange rate:

The currency in Hong Kong is Hong Kong dollar which is pegged to the US dollar, if Hong Kong government wanted that peg to continue, it should tighten its fiscal deficit.

The currency of Hong Kong is an investment asset, many investors diversify their currency allocations, this diversified allocation to the funds of the global investors results in an important cash inflow to Hong Kong.

For the Hong Kong dollar to get part of the allocation, Hong Kong should stabilize its budget in order to attract more foreign investment.

Analyze why the government considers launching a broad-based tax;

Narrow tax base:

Hong Kong has very narrow tax base, narrow tax base means that the collected revenues do not provide enough revenue to cover the expenditure of the country.

If we compare TAX/GDP ratio in Hong Kong compared to other Asia Pacific and OECD countries we find out that Hong Kong has the lowest ratio of TAX/GDP.

Hong Kong has a narrow tax base because the tax base is shrinking since 1998; sound tax systems are based on growing and stable (not volatile) tax base.

Hong Kong has the lowest corporate tax rate among the OECD countries, the current corporate tax stands at 16%.

Erosion of Tax Base:

The erosion of tax base is actually a result of several factors, such as: sliding house prices, illegal betting, e-commerce and online stock trading.

In the following section I will explain each of these factors separately:

sliding house prices:

For a long time, Hong Kong depended on land and property transactions to contribute to government revenue of Hong Kong.

Collected tax from property in Hong Kong(stamp duty, rates and shares and estate duties) is well above the international benchmarks as a percentage of GDP, Property from taxes/GDP=24% for Hong Kong against 5% for the OECD and 10% for the Asia Pacific countries), Reference: Hong Kong Government, Tax Base Study.

Hong Kong depends on Land sales revenues in financing its budget, this has made Hong Kong increasingly dependent on non-tax revenues.

In the tax base study that has been conducted by the government of Hong Kong and KPMG consultancy, the study reports the fact that Hong Kong’s non-tax revenue is about 80% of its tax revenues against 16% for OECD benchmark.

Because Hong Kong has enjoyed a buoyant business environment for years, banks started granting credit very easily to businesses, the expansion of credit was accompanied by rising house prices, land prices started going up sharply from 1984 to 1997, Gerlach, S & Peng, W(2002).

Many companies found working in the construction sector very profitable because they can make profit from two sources:

Net profits from building new houses and buildings.
Profits from capital gains resulting from continuous increase in house prices.

The construction sector was one the most attractive economic sectors in the country.

Foreign and national banks expanded credit to companies which operate in the construction sector; the banking sector played an “accelerator” role in the run-up of the property prices.

The government in Hong Kong has constructed its tax system around the fact that land prices are going up all the time because they are in demand.

Because of the financial crises of August 1997 that hit south east Asia and also because of the government policy on housing, Revenues from land sales and land utilization(lease, rent) dropped dramatically, suddenly the government found its huge revenues from land dwindling.

On the 16^th of January 2000, the secretary for the treasury stated that:

“The other significant factor supporting our finances, in recent years, has been the high levels of revenue from land and property transactions. But as property prices stabilize, the huge windfalls are unlikely to recur in the future”

illegal betting:

Hong Kong’s treasury depended on revenues from betting activities in the country.

Hefty taxes has made too many people start thinking about illegal betting, Schuman,M(2004).

On the 16^th of January 2000, the secretary for the treasury stated that:

“The impact of illegal gambling and the rise of gambling through the Internet threaten to erode our income from betting tax”

Hong Kong’s Home Affairs bureau said handle plunged 30% from 1996-97 to 65 billion Hong Kong dollars (US$8.3 billion; euro6.5 billion) in 2003-04, while government revenue from betting dropped from HK$12.3 billion (US$1.6 billion; euro1.24 billion) to HK$8.78 billion (US$1.13 billion; euro882 million).

Meanwhile, the amount of cash and betting slips seized from illegal soccer and horse gambling operators jumped from HK$9.38 million (US$1.20 million; euro942,000) in 2001 to HK$19.7 million (US$2.53 million; euro1.98 million) in 2004, according to the government.

The government said handle is projected to drop another 30% by 2007-08 if no action is taken, Reference: the associated press (2005).

e-commerce:

Hong Kong tax system is based upon territorial system, which means that profits and incomes that are derived from Hong Kong should be taxed according to Hong Kong tax laws, the development of e-commerce and the expansion in on-line selling to customers who are not based in Hong Kong through websites that belong to the global network makes hard for the government of Hong Kong to draw a clear line between the income that is derived from the internet and the income that is derived from Hong Kong.

On the 16^th of January 2000, the secretary for the treasury stated that:

“The spread of e-commerce will have implications on all governments’ abilities to assess and collect business-related taxes. For us, the impact will be further accentuated by the territorial-base of our taxation regime”

online stock market trading:

the development of modern communications and the development of the financial markets made trading on-line possible from all over the world, trading has been made very easy by websites that are based on the web, the development of futures, options and spread betting markets have made possible to trade 24 hours a day.

It is very hard to impose taxes on online trading because the companies who established these websites do not have a physical place in Hong Kong.

On the 16^th of January 2000, the secretary for the treasury stated that:

“The acceleration in global stock market trading through the Internet will require us to consider whether the stamp duty we charge on stock transactions can be maintained at its present level, or whether by doing so we would impede the further development of the Hong Kong stock market”

Hong Kong has a prolonged problem in tax revenues resulting from low income tax on working population and the constant decrease in the number of working individuals because of aging.

The secretary of treasury addressed this problem by saying:

“For we all take for granted the low level of taxation which we enjoy in Hong Kong. For example, less than 40% of the workforce pay any salaries tax, and only 10,000 people pay the maximum salaries tax rate of 15%. Companies pay profits tax at 16%, and only profits arising in Hong Kong are subject to tax.

Also we have no taxes on other income or capital gains, no sales or value-added taxes on what we buy, and duty is payable on very few commodities.

So much for revenue, on the expenditure side, the community expects more and better public services. An ageing population will place increasing demands on our health and welfare services. The need to tackle pollution will bring substantial costs. We need to reconcile this need for additional spending with a contracting revenue base.

Based on the above reasons the treasury of Hong Kong is considering widening the tax base a strategic option.

Expanding the tax base is a constitutional obligation as well as an economical obligation.

Hong Kong has to reduce its deficit if it wants to keep the value of its dollar strong and able to attract investors.

…. These sound practices are now enshrined in the Basic Law. So we are under a constitutional obligation to keep our finances in a healthy state. With a fiscal deficit last year, and a projected deficit this year and next year, the law and prudent financial management demand that we bring our finances back into the black in the near term. This would also have the added advantage of maintaining our fiscal reserves at the level necessary to help support the Hong Kong Dollar, an indisputable requirement given the events of 1998.

5- Aging population:

Hong Kong has an aging population; this has put an increasing pressure on the social security system and the infrastructure.

This has made the secretary of the treasury to state:

“The directions indicate that the continuation of current revenue and expenditure policy is not an option“

Considered that introducing general consumption tax is the most suitable for Hong Kong?

In order to see if the general consumption tax is the most suitable tax or not we have to evaluate all Hong Kong tax options.

Tax Options for Hong Kong:

1- Reduce Personal Allowance: Hong Kong tax systems is one of the most generous tax systems in the world, as we have said earlier fewer than 40% of the work force pay taxes, some tax experts are suggesting the government reducing its tax free income allowance in order to increase tax collection revenues, experts say that a reduction in the basic allowance of 10% will raise about $2bn revenue, even if Hong Kong decided to reduce the personal allowance by 50% this will raise 90% of its traditional revenue from the existing tax base is simply contributing more revenue, this options will not be suitable to Hong Kong because it does not broaden the tax base, this option will increase the weight of salaries tax in the overall tax collection, KPMG Tax base study.

2- Expand the Existing Tax Base via imposing capital gains tax: this option is not considered the best option because it will affect investment decisions negatively and lead to capital outflow from the country and make the country lose its competitive advantage.

Imposing capital gains tax may cause job losses and that will make the tax collection from salaries substantially less, so the gains from imposing capital gains tax will be offset by loss of tax from loss of income and salaries taxes.

Imposing taxes on dividends may not lead to desirable results.

3- Increase corporate taxes:

Increasing corporate taxes is one of the main issues that the government of Hong Kong is discussing, most of the analyst believe that this is not an option because increasing the corporate tax will simply cause damage to the position of Hong Kong in the global market, analysts think that there is a global trend to reduce corporate tax in all over the world.

Analysts think that countries are in competition with each other to provide facilities and tax concessions to corporations.

If Hong Kong increased its corporate tax, it would be very easy for corporations to shift their headquarters to somewhere else in the world.

According to Hong Kong Institute of Certified Public Accountants the government of Hong Kong is suggesting giving more corporate tax concessions to corporations in the following three areas:

A- Full profits tax exemption to regional headquarters/offices in

Hong Kong in respect of management consultancy income

Derived by the Hong Kong entity from associated entities

Overseas.

B- Exemption of interest income received by regional offices from

Loans made in Hong Kong to their overseas associates.

C- Group relief.

D- Loss incurred in the current year of assessment should be

permitted to be offset against the assessable profits of one

previous year.

3- Introduce New Taxes: introducing new taxes (apart from VAT/GST) could an innovative solution to Hong Kong’s structural fiscal deficit. In fact, there is no limit to the number of taxes that a government could impose in order to provide suitable macroeconomic environment for development. For example, Hong Kong could introduce environmental taxes in order to reduce carbon dioxide emissions from cars and factories, we all know that developed countries contribute significantly to the increasing stock of greenhouse gas emissions that causes global warming.

Because Hong Kong has very busy airports and sea ports, Hong Kong could impose new taxes on land and sea departures.

Experts advise the government to outsource the activities that it does not usually do efficiently, outsourcing will help the government reduce the deficit that is caused by inefficient use of resources.

Experts did not only advise the government to introduce new taxes but also to abolish some taxes. For example, abolishing taxes on alcohol beverages in order to encourage wine tourism

Experts think that applying this option will not solve Hong Kong’s structural deficit problem completely for the simple fact that Hong Kong has a reputation that it is a low tax country and if the government imposed taxes on several economic activities, Hong Kong reputation will be affected and this may have a damaging effect on the position of Hong Kong in the financial and business world.

What experts are trying to say that Hong Kong government should introduce new taxes and abolish old taxes in order to keep the current balance of taxes and respond to the modern needs of the society (such as environmental taxes).

4- Broad-Based tax on general consumption: this could be VAT (Value Added Tax), GST (Goods and Services Tax) or Sales Tax.

Kong’s structural deficit problems.

Government says that a 3% GST will yield about $18bn which stands for 1.5% of GDP.

Analysts recognize that GST is a powerful solution to Hong Kong’s Problem, 3% GST is capable of solving the problem, and in addition to that, 3% GST is in line with international standards.

This tax is not only capable of covering the government expenditures but also capable of broadening the tax base since it is imposed on nearly all kinds of consumption.

There are few points that the government needs to take in to its account when constructing the VAT/GST:

It is recommended that the VAT/GST should be simple; simplicity is the common feature of Hong Kong tax system and keeping the proposed VAT/GST simple is consistent with the rest of the tax system.
It is recommended that the VAT/GST should be comprehensive; in other words, it should include most goods and services in the economy, making the VAT/GST comprehensive will guarantee stable revenue to the government and will prevent further increases in the rate of VAT/GST.
Stability: it is advised that the rate of the VAT should stay constant for 5-10 years to come, stability in the tax rate is very important in creating stable consumption and investment decisions, consumers will base their consumption decisions upon the prices of products and s

Is a crime committed because the criminal is a rational being, able to make the decision to offend as an act of free will?
Does the crime occur because environmental influences – parents, peer group, culture and so on – determined the act would invariably happen?
Or is the real clue to be found in the genes: are criminals born not made?” (Hollin, 1989, p.3-4)

Discuss each of these perspectives and consider which theory (or combination of theories) is the most plausible and why?

Introduction:

What motivates individuals to commit crimes, particularly violent crimes against other individuals has been the subject of research in criminology for over two hundred years. Globally the search for the causes of crime continues to form the bedrock of most criminological studies (McLaughlin et al., 2003, p.73).The nature versus nurture debate in respect of criminology has been central to the research, having been especially intense, and often emotional in explaining criminal behaviour (Sarbin and Miller, 1970). The debate regarding the relative impact of genetics and environmental influences continues to inform a considerable body of research.

In respect of commission of crime two distinct schools of thought have dominated the debate. Classical criminologists approach the question from the standpoint of individuals having, and employing, a free will. They take no account of the circumstances or environment in which an individual has been formed, taking the view that a criminal commits a crime because he wants to, the deed depending only on the voluntary determination of the individual (McLoughlin et al., 2003, p.53).

On the other hand are those who believe that an individual acts in a certain way as a result of the circumstances in which he finds himself. It is only when the circumstances conspire against an individual that he will commit a certain criminal act, but this will not happen simply as a consequence of his wanting to (McLoughlin et al., 2003, p.53). Those approaching the problem from this point of view believe that intervention programmes and improvements in circumstances could reduce levels of violent crime in society.

The aim of this paper is to investigate these theories and the evidence in support of each of them. I will conclude with a consideration of which is the most plausible theory, or combination of theories, following on from the arguments given.

The Concept of Crime and Criminology:

Criminal acts may, in their simplest form be thought of as acts which are prohibited by the law and they can be specific to a particular culture, what is acceptable in one, being unacceptable and unlawful in another. There have been wide ranging definitions of what constitutes crime, but this has been problematic as there is no general agreement on what crime is (Jones, 2006).The fact that crimes do not constitute natural or homogenous behavioural categories poses particular difficulties in identifying the subject matter of criminology and for constructing theories of “crime” and “criminal behaviour” (Blackburn, 2000, p.16). Because of the difficulties faced in defining the patterns of behaviour associated with criminality, there is an associated difficulty in isolating the causal effects of intrinsic and extrinsic factors and the extent to which these exert an influence on an individual’s behaviour. More and more evidence is suggesting that the criminal justice system is home to individuals with psychological problems. The fact that many of these problems have been shown to have a genetic component suggests that individuals could find themselves engaging in criminal activity (Jones, 2005). In order to address this problem and effectively treat the individuals involved, it is necessary to attempt to establish the causes of these psychological problems.

Criminal Behaviour:

Criminal behaviour is defined in the context of the legal structure adopted by a society. It is a widely held view that criminal behaviour falls within the realms of anti social behaviour. The influence of genetic components on anti social behaviour has been investigated by Morley and Hall. They suggest three different ways to define anti-social behaviour as follows:

Anti-social behaviour can be equated with criminality and delinquency, with individuals involved being liable to arrest and involvement in the criminal justice system which may include prison;
Anti-social behaviour can be defined as a result of personality disorders, particularly anti social behaviour problems which lead to an increased risk of involvement in criminal behaviour;
Anti-social behaviour can be defined as a measure of personality traits, which can lead to an increased likelihood of engaging in criminal behaviour. These include aggression and impulsiveness, both of which have been associated with increasing levels of criminal behaviour.

(Morley and Hall, 2003, cited in Jones, 2005).

Genetic Factors:

Family studies have been the focus of research for quite some time. While the early studies in this area suggested that there was an inherited basis for a predisposition towards criminal activity, it was shown that environmental influences could modify an individuals characteristics and personality (Joseph, 2001). Research like that carried out by Joseph was questioned largely in methodological terms, but nonetheless raised important questions which became the focus of a great deal of further research (Jones, 2005). In recent years the study of genetics, largely as a result of more sophisticated techniques, has become one of the fastest moving and most significant areas of modern science (Williams, 2004, p.131), giving an enormous insight into the make up and working of the human body, including the mind. Human behaviour patterns are generally accepted to be an interaction of life experiences and genetic predispositions (Mednick et al., 2003, p.77), with an acceptance of biological explanations only suggesting that criminals are inherently defective (Blackburn, 2000, p.136).

The idea that genetics are a factor in criminal behaviour has existed for a very long time, one of the earliest studies in this area being carried out in 1877 by Richard Dugdale. His work investigated the criminal behaviour of a notorious American family called the “Jukes”, six of whom Dugdale had encountered in prison. When tracing their family tree over a period of two thousand yeas, Dugdale found a history of poverty, prostitution, and crime. With no scientific basis for his supposition, he attributed this to the “degenerate nature of the family, and despite the lack of scientific support, the work was very influential at the time. He did not consider the fact that the family members were being impacted upon by the same or very similar environmental factors which could have impacted substantially on their behaviour.

By the end of the nineteenth century, scientific theories in respect of heredity had taken on increasing importance and were being supported by empirical evidence, albeit doubtful in validity. Another early writer, Goring, suggested in 1913 that criminal tendencies were basically inherited. He studies convicts from the same families and found that the correlation for criminal behaviour was very similar to that for some physical characteristics such as eye colour, and stature, suggesting that the genetic material passed on by parents was vital in shaping the way their children would turn out. Parents who were criminals would pass this trait on to their children in the same way in which they might pass on any other characteristic (Goring 1913, cited in Williams, p.132).

Twin Studies:

Twin studies have been important in trying to establish links between genetics and subsequent behaviour. There are two types of twins:

Monozygotic twins come from the same egg. They are commonly known as identical twins, although this is, in fact, incorrect. They have the same genetic structure, are the same sex and have a very similar physical appearance.
Dizygotic twins occur when two eggs are fertilised simultaneously and are no more genetically similar that any two siblings.

It could therefore reasonably be said that if monozygotic twins were to behave in the same way, for example in criminal behaviour, this could be attributed to some sort of genetic influence. If crime is related largely to environmental influences, then it would be safe to assume that all twins would have the same chances of future criminal behaviour. Studies involving twins have been notoriously difficult because of the very similar environment in which they grow up, making it difficult to isolate genetic from environmental influences. The chances of monozygotic twins who are separated would be the ideal for the purposes of research but, due to the fact that twins are not often separated, the sample on which research can be based has traditionally been small.

Such studies have nonetheless been carried out, one of the earliest of which was undertaken by the German physiologist Johannes Lang. he studied pairs of criminal twins and found that in 77% of cases concerning monozygotic twins, where one twin had a criminal record, not only did the other twin also have a record, but the patterns of the offences were similar in nature. In a group of dyzygotic twins, the correlation dropped to 12%, falling to only 8% when pairs of brothers were compared. The studies were subject to methodological flaws in so far as the identification process was based on observation only, and many of the twins came from psychiatric clinics which may mean that the chances of criminal behaviour were increased from the outset (Jones, 2006).

Christiansen attempted to overcome some of the methodological problems of earlier work when he studied the entire database of twins in Denmark. For both male and female twins he found that the rates of offending were more highly correlated for monozygotic than for dizygotic twins. He also found that the more serious the offence, the stronger was the potential genetic component. He was nonetheless aware of the difficulty in separating genetic and environmental factors which he acknowledged in his work.

Adoption Studies:

Adoption studies have been central to research which has attempted to establish the relative roles of genetics and the environment in determining an individual’s behaviour. The rationale behind these studies is that if children adopted soon after birth resemble their biological parents more than their adoptive ones, the evidence points towards genetic rather than environmental explanations. One of the earlier studies in this field was carried out by Hutchings and Mednick in 1975. They compared adopted children whose fathers had criminal records with adopted children whose father did not. They reported a higher incidence of criminal behaviour in those children whose fathers had criminal records than in those whose fathers did not (cited in Towl and Crighton, 1996, p.15). These findings have been refuted by a number of subsequent studies which have suggested that these findings are unreliable, as only a very small number of adopted children engage in criminal behaviour in adulthood. Stott has suggested that it is more likely that the predictor of this criminal behaviour is the result of problems encountered by mothers during pregnancy. Many of these problems are most prevalent in low socio economic groups which is typically the tier to which mothers who have their babies adopted tend to belong. He argues that it this rather than the operation of any genetic factors which accounts for the relationship between criminality in adopted children and their biological parents (Stott, 1982).

Family Studies:

Studies in this area which have attempted to ascertain the relative influences of genetics and the environment, have been largely unaccepted in academic circles. The most salient problem inherent in research of this nature is the notoriously difficult task of separating the nature from the nurture effects and therefore establishing causal links. While this is a problem that is also inherent in the twin studies, it is more apparent in family studies when the genetic similarity between siblings is less.

Mednick and his colleagues tried to address this methodological issue when they investigated rates of criminal behaviour in children of criminal parents who had been adopted and were not therefore exposed to their parents. They found that the children of such parents were indeed more likely than the population in general to engage in offending behaviours, but that the genetic explanation did not account for the types of criminal behaviours these would be. They concluded that there was at least some genetic component in the commission of criminal behaviours (Mednick et al., 2003, p.89-90).

Biological Factors:

Recent research has suggested that characteristics observable at birth will develop in the context of the circumstances in which an individual finds himself. Manicus asserts that it is brain activity that provides the causal mechanism for behaviour thereby making biological processes as real a cause of crime as social processes (Manicus, 1987). Many studies have suggested that crime does, in fact, run in families. Research conducted by Blair and colleagues has pointed to a genetic component in the development of psychopathic tendencies. They suggest that as well as this genetic component, complications during the birth of some babies are a strong risk factor for later violent and anti social behaviour, but recognise that intervention and helping parents could be an important component of ensuring that such behaviour does not subsequently manifest itself (Blair et al., 2006). Problems encountered by mothers during pregnancy has been attributed to subsequent criminal behaviour.

Chromosomes:

Recent advances in the field of genetics have led criminologists to look at the role of chromosomes in the criminal behaviour. In particular scientists have investigated the sex chromosomes and their possible role in crime causation. This research began in 1965 when a British researcher, Patricia Hayes, examined chromosomal abnormalities in a group of Scottish prisoners. The blood test employed, a technique called karyotyping, revealed that twelve out of the 197 examined showed abnormalities in their chromosomes while seven were found to have an XYY chromosome. Normal males possess an XY chromosome, and while there are several different permutations of the chromosome, the XYY male was identified as potentially very dangerous and termed a “supermale.”

A number of criminals have subsequently tried to offer this a defence saying that this biological trait was what spurred them on to criminal activity. This defence was successfully used in 1969 in Australia by one Lawrence E. Hannell, judged a “supermale” and subsequently released on the grounds of insanity. Other attempts have not been so successful. When such an attempt was made in the case of Richard Speck, accused of killing a number of his classmates in the United States, he was not acquitted and it was later revealed that he did not, in fact, have an additional Y chromosome.

While a number of studies have subsequently been carried out in this area the majority or the research has suggested that this is a theory with little or no substance. In their study Sarbin and Miller concluded that “studies done this far are largely in agreement and demonstrate rather conclusively that males of the XYY type are not particularly aggressive” (Miller and Sarbin, 1970, p.199).

Genetic Causes:

Family studies have been the focus of criticism but research carried out by Brunner and colleagues has made a considerable contribution to the research in this area. Despite the relatively unsuccessful investigation into the role of chromosomes as a possible cause of criminal behaviour, in the 1990s Brunner and his colleagues claimed that they had uncovered a specific gene which was linked to criminal behaviour. They engaged in an extensive study of what was termed “the Netherland’s most dysfunctional family”. The male members of the family in question seemed to be unable to control their violent tendencies and were frequently arrested. Tracing the family back for five generations, Brunner et al. found fourteen men whom he said were predisposed to criminality, including violence towards members of their own family who were female.

Brunner and his colleagues suggested that because men have only one X chromosome they are especially vulnerable to any defective gene. After a decade of intensive research the scientists claimed that they had isolated this defective gene. The gene, they said is the one which is responsible for production of the enzyme “monoamine oxidase A”, which is involved in the process by which signals are transmitted in the brain. Specifically it breaks down serotonin and noradrenaline which, when found in excess, have been linked to aggressive behaviour in humans. Since men with the mutated gene identified by Brunner and his colleagues do not produce the enzyme necessary to break down chemical transmitters, researchers suggested that they were overwhelmed by stimuli in the brain, a situation that causes uncontrollable urges and leads them into criminal behaviour (Schmalleger, 1996, p.182). While the authors accepted the fact that their research had not been replicated in any other studies, they did suggest that this was an area for future research, suggesting as it did, that genetics play an important role in criminal behaviour (Brunnet et al., 1993).

Monoamine oxidase has been linked with other neurochemicals which may be linked to criminal and antisocial behaviour (Jones 2005). Eysenck’s personality theory has been used to measure possible factors of personality which may be influential in the commission of crime. Suggesting that within the criminal fraternity different types of crimes are related to different personality patterns (Eysenck, 2003, p.93) Eysenck has pointed out that it is connected to norepinephrine, epinephrine and dopamine, all of which have been linked with personality traits important in psychosis Eysenck, 1996).

Biochemical Factors:

An increasing awareness of the physiology of the human brain, coupled with more sophisticated techniques, is leading modern criminologists to investigate the effects that certain biochemicals have on behaviour. If it were to be established that certain chemical imbalances were responsible for certain types of criminal behaviour, then this would lend weight to the theory that certain behaviours are indeed not within the control of an individual.

The Effect of Serotonin:

Current research centres on the role of neurotransmitters, chemicals in the brain which are fundamentally important to all human behaviour. There has been considerable research in respect of serotonin levels and the role this plays in criminal behaviour, where it has been identified as an important element. Serotonin has been shown, in both animal and human studies, to be an inhibitor of aggression, so low levels of serotonin have been linked to violence and suicide in humans (Williams, 2004, p.152). Raine found that individuals who were prone to anti social behaviour had lower than normal levels of serotonin in their brains (Raine, 1993), a relationship also found in research carried out by Virkkunen and Linnoila (1993). This would appear to confirm the findings of the Dutch study described above. Serotonin has been linked to brain development and it has been suggested that a disorder in this development system could lead to an increase in levels of aggressiveness and impulsivity, suggesting that the individual in this case would not have full control over his actions.

While scientists have been able to link a number of neurotransmitters, with various sorts of anti social behaviour, the nature of the relationship is not completely understood. It is unclear whether these neurotransmitters are linked to all aggression or are linked to specific types of aggression and may lead to the commission of certain specific acts and crimes. Williams points out that the role of neurotransmitters is a classic chicken and egg situation. It is not known whether the mood produces the neurotransmitters or whether the neurotransmitters lead to changes in an individual’s mood (Williams, 2004, p.153).

Criticisms of the Biological Approaches:

Attempts to explain criminal behaviour in the context of biology and genetics have been criticised, often on the basis of methodology. Walters and White have criticised many of the studies carried out on the basis that they have been badly designed, and largely inadequate in addressing the relevant issues. In particular they highlight the following shortcomings:

Few biological studies have adequately explained the concept of criminology, often relying on a single arrest as an indicator of criminal tendencies;
Twin studies, in particular, have often been inaccurate in identification of monozygotic and dizygotic twins;
Biological data has often been based on interviews with individuals which is subjective in its nature and therefore open to a range of interpretations;
Methodological problems are common including small sample sizes, lack of control groups and the use of inappropriate data analysis techniques;
Results have not shown consistency from country to country.

(Walters and White, 1989).

Personality Disorders:

The term “personality” is used to describe an individual’s temperamental and emotional attributes that are relatively consistent and will influence behaviour (Jones, 2006, p.398). In recent years there has been an increasing focus on individual personality traits, persistent or stable personality characteristics, and disorders and this focus has been seen as extremely useful in predicting future criminal behaviour. Theories talk about a criminal personality in which it is assumed that individuals possess definable and dominant sets of rules which determine how they will behave in virtually any situation (Williams, 2004, p.178). Many tests of personality have been developed by psychologists over the years in order to test the theory that those who have criminal tendencies have personalities which are different from those of the normal population. Many of the personality disorders which manifest themselves are initially evidenced in childhood. If it were indeed to be the case that these are predictive of later criminal behaviour, intervention with children displaying personality disorders may be a useful preventative measure.

Holmes and colleagues have identified three personality disorders which can be diagnosed in childhood and have been shown to be predictive of later behaviour:

Oppositional Defiance Disorder – characterised by argumentativeness and non-compliance. As these children become older their behaviour often changes for the worse, with them often starting to engage in petty crime and displaying aggression to their peers and others;
Attention Deficit Hyperactivity Disorder – children with this disorder are unable to stay focused on any one task for anything but a short period of time. These children are unable to analyse the consequences of their behaviour, cannot easily see things from another’s point of view and are generally unable to learn from their previous behaviour;
Conduct Disorder – children diagnosed with this disorder are already at the stage where they have begun to break society’s rules. This is the most severe of the three personality disorders as diagnosed in childhood and is often predictive of the development of Anti Social Personality Disorder, a disorder which can only be diagnosed when an individual is aged eighteen, and at which point they have travelled quite far down the road of anti social behaviour and not conforming with the norms in society.

(Holmes et al., 2001).

With a clear link established between these early childhood disorders and future criminal behaviours, early diagnosis and effective interventions are vital in this area. Tests for determining an individual’s personality and the likelihood for future criminal behaviour have come under considerable scrutiny. The tests themselves have developed considerably in their complexity and the sophistication of their methodology but a study by Arbuthnot and colleagues stated that the doubtful validity of much of the research that had gone on in this area prevented their coming to the conclusion that there was a link between personality and criminal behaviour (Arbuthnot et al., 1987).

Problems in respect of personality theories have mainly concerned the way in which personality has been measured, usually on some numerical scale. Personality tests are also problematic in that they require objective attitudes in respect of what constitutes normal. Inherent in the use of personality tests is that those who commit crimes and go against the norm must have something different from that which is viewed as normal.

The personality theories that have found the most application in the context of criminality are psychoanalytic explanations and the learning theories. There is some evidence that personality difficulties displayed in childhood are highly predictive of later criminal behaviour and can be inherited. Personality theories have not really seen much application in the predictive context, having been used mainly in respect of treatment after an offence has been committed. The rationale behind using personality tests is that behaviour can be changed by behaviour modification techniques.

Criticisms of Personality Theories:

Personality theories generally assume that all individuals have a core personality which explain how they will react to a wide variety of stimuli and whether they are likely to become criminal. They take little account of the fact that these could be changed through interventionist or environmental factors.

Environmental Influences:

Criticisms have been levelled at the approach which considers genetics as being the dominant factor in criminal behaviour, often because the methodology of the research conducted has been questioned. One such study was that carried out in Denmark in 1977 by Christainsen who reported that identical twins inherited some common characteristics that increased the likelihood of their becoming involved in criminal behaviour (Crristiansen, 1977). The criticisms levelled at this and other similar research is the fact that twins may share higher than average levels of shared experiences, thereby making it difficult to isolate the genetic component as a causal factor in such studies.

The first real attempts to consider crime in the context of where criminal lived, and their associated environment, took place in the 1820s in France and Belgium. These studies were pioneered by Adolphe Quetlet and Andre-Michel Guerry who collected data about the areas in which criminals lived, and in so doing began a field of research that would continue throughout Europe for a long time to come, eventually being adopted by American and global researchers also.

Modern Environmental Criminology:

It has been suggested that the impact of the environment on behaviour reduces with age. While adults are able to exercise some choice as to their environment, children have no such choice, so the impact of the environment in more profound (Jones, 2005). Reluctance to consider genetic factors as instrumental in criminal conduct has had political overtones (Haller, 1968), as it suggests a somewhat depressing prognosis for individuals born with the genetic predisposition to become criminals. The idea that there as an inextricable link between crime and the environment has been considered as an alternative and really came to the fore in the UK in the 1970s, with crime figures beginning to rise sharply, and crime being increasingly attributed to young, disaffected males living in areas of social deprivation (Jones, 2006, p.134).

Situational Crime Theory:

The ideas surrounding environmental criminology have had a considerable impact on public policy in the UK. The Home Office Research Unit was set up in the 1950s and began to work on what it called situational crime prevention, an attempt to reduce the opportunities to commit crime. This approach does not see crime as the result of any physiological or biological impulses but sees it as more opportunity driven which causes individuals to make choices in the context of these situational factors (Jones, 2006, p.138). Situational crime theory does not focus on career criminals who will find their own opportunities to commit crime, but seeks to address the problem of those who may not have been involved in the criminal justice system before. In the context of this theory the key factor is opportunity and the exercise of free will, and proponents of this approach argue that a reduction in opportunities will, in turn, lead to a reduction in the commission of crime.

Situational crime theory has its critics who suggest that the theory focuses too greatly on the crime at the expense of focusing on the type of persons involved in the commission of crimes. Tonry has argued that it is likely to increases the fear of crime among the general public (Tonry, 2004). Despite criticisms, recent research carried out in London has added weight to the idea that there may indeed be a causal link between deprivation, crime and a particular area, when a study by Dorling and colleagues in 2001 suggested that patterns of social deprivation in London have changed very little since the turn of the nineteenth century (Dorling et al., 2001).

Crime and Poverty:

Because large numbers of crimes are committed by people who have very little money, there has long been a school of thought that there is a causal link between crime and poverty. This is a view which has been held for many years and was first investigated in France by Guerry who found that in the more affluent areas there were higher rates of crime against property while in the poorer areas there were higher incidences of violent crime. There were poor people living in the more affluent areas and Guerry concluded that it was not poverty per se that caused higher rates of crime but the fact that there was more opportunity in the wealthier areas for crime against property. Recent research as been inconclusive regarding the role played in criminal activity by poverty. What does appear to be clear is that there is no direct link between crime and poverty as an isolated factor as there are, for example, many tribes who are materially very poor but did not engage in high levels of criminal activity (Williams, 2004, p.286).

Research has suggested that poverty only becomes a factor in criminal activity when there is a large degree of social inequality, a large gap between the “haves” and the “have-nots”. This leads to the suggestion that if, in the population as a whole, there was a degree of poverty, this would not lead to higher rates of crime. This has been coupled with the suggestion that it is not even the inequality which is the causal factor but the perception that this is unfair which leads to higher levels of criminal activity (Stack, 1984). Recent theories have investigated the link between crime and inequality and it has been suggested by Vold and his colleagues, who refer to a number of studies, that there is a link between inequality and violent crime including homicide (Vold et al., 2002).

Family:

In terms of environmental factors, none is more important or exerts such an influence in shaping an individual as the family in which he grows up. Famil

The Skilled Helper Approach

Outline

This paper is about integrative counselling using the skilled helper approach. In this paper we will discuss the theory and application of the integrative model of the skilled helper and components of person centred counselling and solution focus therapy. We will look at this integrative model and the benefits as well as the possible downsides. A case study will then be presented using this integrative model to counsel the client.

Introduction

Integrative counselling looks at several approaches that have been combined and used within a therapeutic counselling relationship. Coming away from a single counselling approach and combining suited models of counselling, both the counsellor and client reap the benefits of the integrated model (Arkowitz, 1997). Robertson (1970) stated that his ‘radical eclecticism’ bypassed theory.

Introduction – Gerald Egan

Gerald Egan is professor of organisation studies and psychology and programme director for the centre for organisation development (CORD) at the Loyola University of Chicago. Egan developed the skill helper model and in 1975 published the first edition of his book The Skilled Helper , which demonstrateding an eclectic framework for a problem management approach to the counselling process.

The Integrative Counsellor

There are counsellors that see themselves as being eclectic in their work. It is viewed they are syncretism-using techniques from many models^[RZ1]. Eclecticism – no or little theoretical rationale^[RZ2]. Merely pulling techniques from many models without a sound rationale can only result in syncretistic confusion (Lazarus, 1996, 1996; Lazarus, Beutler, & Norcrossk, 1992).

Development of Therapy

The three main influences on the development are the skills training approaches to counselling, the social influence theory, and behavioural theories of learning and change. Egan sums his approach up as ‘A conceptual framework…. to organise borrowed ideas, methods and techniques systematically … and to integrate them into [one’s] own theory and practice of helping^[RZ3].’’.

Theory

The skilled helper model is a Tran theoretical approach to integration. The client seeks counselling or assistance when they are experiencing difficulties in coping with problems in his or hertheir lifeves. The Counsellor will find and act on solutions to these problems. This is done by using a problem solving process. The process is demonstrated by using 3 three main stages which originally were titled Exploration, Understanding and Action, and which are now renamed as Present Scenario, Preferred Scenario and Getting There^[RZ4].

The Three Stage Model

The three stage model consists of three steps within three stages. Egan describes this model as “A a cognitive map with practical potential, complex enough to make sense of reality and simple enough to use^[RZ5].”.

1 Present Scenario

The client is helped to describe and explore the present Scenario^[RZ6]’,

she is going through at present

2The Preferred Scenario

Articulate a preferred scenario that includes future goals

aAnd objectives.

3Getting There

Develop and implement action strategies forrom moving

from the current to preferred scenario.

The Skilled Helper Model is integrative, going mainly through three stages:. Person– centered, to establish the therapeutic relationship;, Gestalt, for intense work on awareness; and behaviour therapy to work on change. Egan states ‘do whatever is ethical and works.’ (1990:62). (Robertson (1979) stated that his ‘radical eclecticism’ bypassed theory. The writer^[RZ7] argues that theory is evident within the approach as it is influenced by strong theoretical approaches integrated into the skilled helper.

Dr Carl Rogers argues that “It is the client who knows what is hurting and in the final analysis it is the client who knows how to move forewardords ..…. the counsellor’s task is to enable the client to make contact with his own inner resources rather than to guide, advise or in some other way influence the direction the client should take …. Thus thus emphasising the central importance of the client’s phenomenological world”. (Mearns & Thorne, 1988, P1).

The three stage model is a systematic way of learning to work with clients helping them to cope more effectively with their life,. ‘tTo manage their problems in living more effectively and develop unused opportunities more fully’, and to ‘help people become better at helping themselves in their everyday lives.’ (Egan G., ‘The Skilled Helper’, 1998, pp. 7-8). Using the approach counsellors are able to explore the client’s feelings, thinking and behaviour.

In stages one and two, clients are helped to explore and understand themselves their feelings and their world better, and in a different light. In stage 3 three, clients are helped to take effective action to achieve constructive change.

Assumptions of the Model

Some counsellors see the skilled helper model as being basic counselling and a paradigm that is made more complicated than necessary. Egan is slightly contrary about human nature^[RZ8] ……..

Egan and Cowan 1979^[RZ9]

Egan and Cowan 1979, 1980: Egan, 1984^[RZ10]

The focus of the skilled helper model is concentratesd on the client, with the aid of counsellor, in enabling the client to develop new skills of self management, interpersonal communication, and decision making. The counsellor and client wWorking together on strategies to bring about change, and they. examine Looking at what the client would like to change or manage differently.

Psychological Health

The heart of the problem solving process is the client’s action itself (Egan, (1975:227). This is achievable by enabling the client to tell his or her storey. The skilled helper model is one that sees the potential of change to take place in clients (Inskipp, 1993:92), w. Where the client shi8fts their behaviour from unhealthy to healthy to juvinate^[RZ11] positive change. Change comes about through action “The heart of the problem-solving process is the clients’ action itself (Egan, 1975:2227^[RZ12]). This is by way of the client letting go^[RZ13].

Change begins to take place when the client is given space to tell his or her their storey. In telling of the storey, the resources for change areis identified and used. Client The client is helped to reframe by seeing the story and, situations in a different light, seeing him or heerself as a survivor rather than a victim. However, simply Just wanting change to take place is not sufficient. The cClient must be active in the process of change by way of adapting his or her behaviour through action, reflection and new learning. “Constructive change is always the bottom line.” (Egan 1990:207).

Practice and clinical issues

The counsellor has to be effective in the way the approach is used. ‘Helpers are successful to the degree that their clients – because of client – helper interactions – are in a better position to manage specific problem situations and develop specific unused resources and opportunities more effectively.” (Egan, 1998:7). The role of the counsellor is to assist the client in understanding his or hertheir storey and /problem, and assist with skills that will aid their client in being effective in the management of particular challenging situations.

The gGoals of the counsellor in the relationship are to build and empathic alliance;, to assist;, identify;, support; and to evaluate.

Counsellor’s use of the Model

Understand and confidence of the 3 stage model with a willingness to adjust to accommodate the clients needs^[RZ14]. Counsellor works with the client in the here and now. Some of the skills used would be their natural internal supervisor and , attending skills, through awareness and use of the mnemonic SOLAR (squarely, open, learn, eye, relaxed). For non verbal communication, using the model as a template for change, the counsellor worksing therapeutically at the client’s pace using assessment skills, identifying if the degree of difficulty experienced by the client gets in the way of achieving change in mood and relationships.

Making a contract with client, focusses of the work, nature and frequency of contact, confidentiality and possible limitations of it, review and evaluation^[RZ15]. Evaluation is ongoing through sessions as this helps identify what is /or is not helpful during the session.

Use of skill – through communication

The counsellor engages with the client attending^[RZ16], active listening, establishing and conveying empathy and the use of probes and questioning, immediacy, and appropriate self– disclosure to client. Brain storming is a cognitive way of helping client to look at new perspectives on situations. Brainstorming generates hope that this^[RZ17] can be different – this helps client to move foreward into working creatively. The cCounsellor can engage with the client using a variety of different skills, such as . Prompting — : what do you really want for yourself in this situation, miracle Miracle Ququestion – brief therapy, Blank wall – visualisation – NLP (DeShezer, 1988; O’Connor and McDermott, 1996)0.

Goal setting and reviewing helps client to see hopes as goals that are SMART^[RZ18], specific, measurable, achievable, realistic and time-limited.

Change Process

Egan takes his process of change from the behavioural approach (Wopolfe et al., 1989:11). Seeing behavioural change over cognitive change^[RZ19]. The counsellor uses empathy to form a strong working alliance with the client through the exploration of feelings. The exploration of feelings plays the main part in effecting for change to take place. Within an article about change showedOne source identifies three3 agents for change: stated affective experiencing, cognitive mastery and behavioural regulation (Karasu 1986:690). ^[RZ20] These three3 agents play a major part in the skilled helper approach for change to take place.

Nature of therapeutic relationship

Egan sees that the therapeutic relationship is instrumental in the counselling process. Working to achieve goals within specific time restrains the counsellor takes on the role of^[RZ21] . ‘A relationship of service, not an end in itself’ (Egan 1990:57). Whereby Rogers argues that the therapeutic relationship is fundamental in the counselling process^[RZ22].

As part of the skilled helper approach, Egan incorporated Rogers’ core conditions. Egan describes himself as ‘standing on Rogers shoulders^[RZ23],’ owing much to him as the core conditions is a major part of the approach. Rogers, on the other hand, concentrates on the person as a whole human-being. There are many differences between the two approaches (see Table 9.1).

Format of a typical session

Each session is different as there are is no set format. Tthe process depends on where the client is with the process of change.

Indications and contraindications

This approach is similar to the cognitive and behavioural approaches. The model is only beneficial for clients with mild to moderate conditions. The approaches concentrates itself onwith the client having the motivation to change and test out feelings and perceptions in a new framework.

The model can be used with most clients and situations including depression ()Mynors-Wallis et al., 1995; Sseeley et al., 1996), and working with young people (Mabey and Sorensen, 1995).

The model is described as being eclectic (Inskipp and Johns, 1984).

Weakness of Model

The model can be iInflexible, not suitable for clients with deep roouted problems, and there is little research to verify its efficacy^[RZ24]. Although the problem management programme is beneficial, it may have to be modified to fit some cultures.

Obstacles to Integration

Within Tthe development and usage of an integrative mode,l as opposed to a single model, has its drawbacks and possible pitfalls. Hastily combining counselling models on a at whim just because the models separately are pleasing does not necessarily not lend itself to necessarily be combined successful combinationly into an integrated model.

No one theory or model can testify that it ey holds athe patent off the truth. No one single model or set of techniques have or can always be effective with diverse clients. Nonetheless, tThere is a current trend, as the basis for future counselling practices; writers are developing integrative approaches (Lazarus, 1996^[RZ25]).

Some models of counselling integration are The Skilled Helper Model, Cognitive Analytic Therapy (CAT) and the Conversational Model.

There are times, however (dependent on the client) when a single established integrative model may be used. For the purpose of this essay an example of the Skilled Helper model will be the main integrative model.

Case Study

Introduction

This case study looks at the use of the skilled helper model with Lisa, a 16 year old college student on a one year foundation course. Her problem is that she finds herself more and more angry. Every week there is an aggressive situation at college between Lisa and her peers or with members of the college staff. She has been officially warned twice and is in great jeopardy of being thrown off her course and out of college. Throughout many of her comprehensive school life she has been expelled from several schools because of her behaviour. It was recommended by the Student Support Manager that Lisa attend some sessions of counselling to “get herself sorted out^[RZ26]”. This was an option recommended to herim as an alternative to expelling her.expulsion.

Theory

“Helping relationships are influenced by whether the helper is a trained counsellor or is using counselling skills as part of performing another role. Helping relationships takes place in the head and in the heart, as well as face to face. Ultimately all helping relationships need to become client self– helping relationships.” (Nelson-Jones, 1999, P.118)

Stage one looks at the problems, issues, concerns, and undeveloped opportunities for Lisa.

Lisa agreed to attend counselling;, this was not a new experience for her. She had previously received counselling and anger management several times and stated, “Tthey don’t work.”.

Assessment and Contracting took place during the first session. Lisa was listened to, enabling her to tell her storey of what brought her to counselling and the lead up to it. During the session, probing was used to discover that Lisa felt alone even though it appeared she had many friends. She was the leader of her girl gang. “Not real friends, they don’t know me. They’re only with me because I fight for them. Some of them are bigger than me.”. She felt unloved by her mother because there was no discipline and they only encouragement given was for her to stand up for herself. Her dad has spent years in and out of prison. Lisa felt ugly and was often told that she wasso. She dressed in boys’ clothes and kept her strawberry blond hair (which almost reached halfway down her back) secured with an elastic band. She had an older sister who was 20, who had changed her religion and was preparing to marry within into a Muslim family. Lisa had two younger brothers that seemed to get away with ruling the household with their demands. Lisa proudly carried a small photograph around with her of her deceased sister, the only person she really felt loved by, and the only one she loved. With more gentle probing, it became apparent that her sister died as a baby two years before Lisa was born^[RZ27]. Her past time is spent hanging out with her friends and at times purposely causing trouble. She left school with no formal qualifications, and therefore was placed on a foundation course which she found did not hold her attention as she got through her work quickly. and so Aas she could move foreward, Lisa found she was helping other students in the class with their work^[RZ28].

Lisa is asked “what do you really want for yourself in this situation?” Brainstorming technique is used to look at course and career options. Lisa looks into the future of how she would love to be an accountant as she is very good at maths, or even an actress^[RZ29]. In the past she had thought that someone like her would not have the opportunity to do either, but she was happy to look at moving foreward.

A mental list was used for the client to come up with some of the things she would like to change. She realises that she is on the wrong course and comes to know that by accepting support from the educational guidance worker and Foundation studies manager she may be able to change her course to one that will be pitched at a higher level to do business studies and accounts. She also realises if she had toned her behaviour down at school for the last few weeks before the end of term, she would not have been expelled^[RZ30] and would have done her exams at school rather than giving up her 9 GCSE’s even though an alternative school was offered for her to take her exams. Her estimated grades were mainly B’s and C’s.

3 sessions – Llisa seems agitated, feeling she has to no choice but to come. – options given^[RZ31].

Fears of exclusion, no qwualifications, failure^[RZ32]

The counsellor gave aAssurances that given everything is confidential with the exception of disclosures to child protection agencies, or in the case of imminent harm to self and others. The counsellor also eExplained counselling is not a prescription; n, she not does not have to come, the decision will be hers, no implications with or from college staff^[RZ33].

By telling her storey at the place^[RZ34] she has more insight into the issues she faced. She sees herself as helpful, hardworking and a good communicator.

The model of the skilled helper is explained more fully to clients

Part of the process within the model used. Learnt basic features of model for focus, direction, guidance interactions with peears^[RZ35].

Stage 1 – Step 1 — Tthe storey

Client tells her storey which is facilitated by me using probes;, this encourages the client to offer detailed information about herself. This enables client to understand her situation, so as she can look at what needs to be done to manage it.

Goal setting – What do I really want?

Step 1b – Blind spot

Lisa is helped to identify signifcicant blind spots about herself so as she can develop new perspectives in moving foreward.

This is used to break through areas that prevent Llisa from seeing herself and her situation^[RZ36].

Step 1c — Cchoosing right problem to work onn.

Lisa has many problems, I hHelped her work on problems that will make a substantial difference in her life. The client is encouraged and supported in working on her problems.

The questions^[RZ37] help Llisa to look into her future. Lisa discovers there are many things she wants; there is a , right course for her, one that she is interested in and can enjoy. She can enjoy bBetter relationships with peers and staff. She can enjoy tTime for herself and her mom.

Lisa was fFurther encouraged to look at needs and prioritise them. Overall she needs to feel she is achieving academically, making progress in relationships with family, and she would like to change her image – “be a girly girl.”.

Setting priorities help her to think about how she might achieve them. I then helped her to explore and clarify her priorities. Tthis is done by asking her how would she know she is achieving, what would it look like. The type of course is then explored in the areas of accountancy and performing arts and which one would be more suitable for her needs and wants, and by. looking at which one is more practicael and achievable.

Stage 3 — Developing action strategies

.

At the beginning of counselling, mentoring support group work was offered to Lisa. This service was offered again to client^[RZ38]. She breaks through some blind spots, getting a better understanding of and prioriitising her needs, as well as. eExploring what she needs to do to get what she wants. Lisa talks more about her hoped– for ambitions prioritising accountancy, making contact with the college guidance worker to see what she would need to get onto a course. On being an actress, it was decided by the client that she would need to attend sage school or the performing arts course at college. We explored each profession, looking at pay, reliability, enjoyability, the possibility that it would possibly help form good character, as well as career endurance. Accountancy took priority, coming out on top in Lisa’s evaluation. This also linked into the fact that the client enjoys and excels in maths and has experienced accounts at school., Armed with this information, the client contacted her personal tutor and foundations manager. She put her case forward to them them — both to be able to be transferred onto an accountancy or business studies course with administration. Giving the client space to do this contributed to her empowerment.

The mentoring group consisted of eight 8 students, 16 – 18 years of age. This gave students a safe place to explore her feelings about her relationships and her body image. She Lisa bravely asked “Ddo your moms help you with your hair and make– –up? Ttalk to you about boys?” The questions generated much conversing over two sessions. As a result of the group, work the hair, beauty and holistic therapy departments were approached. Client wanted to be a “gfirly– girl,” which meant she wanted help in knowing how to style her hair, and to apply put make-up on. Sessions for a course of holistic therapy to help with stress were arranged;. these therapies helped her to physically see herself in comparison to whathow she had imagined within her own mind.

By being a valued member of the weekly group, the client found she was able to receive support as well as give it, leaving her feeling empowered. Being action^[RZ39] in her therapy has allowed her to concentrate on her course, career prospects, and image, which leads to improved personal conduct, relationship with peers, members of staff and mother, thereby. rReducing the anger and sometimes hate she felt for herself and resentment towards her mother.

Client Lisa eventually moves out of the group, as she feels less angry and stressed. Although client she may have benefited from staying for one or two more sessions, the end of session evaluation was that the client felt that she had sufficiently improved and wanted to withdraw; therefore the helping process had served its purpose (. Waehler and Lenox (1994)). Therefore Hher relationships are more productive and enjoyable; she is. feeling better about herself as she knows some of the feelingss and views of her peers as they saw her — . hHow she was and how she can be. by way of a connextios^[RZ40] worker client is being helped to communication her needs to her mother taki

In Sidaway v Board of Governors of the Bethlehem Royal Hospital [1984] 1 ALL ER 1018 Dunn LJ stated in the Court of Appeal that ‘the concept of informed consent plays no part in English law’ (per Dunn LJ at 1030). Is this still an accurate reflection of the law?

In Sidaway, the plaintiff brought an action against the hospital and surgeon who performed an operation on her back. The operation she had undergone carried an inherent risk to her spinal column and nerve roots. Even if it was performed perfectly, there was still about a two per cent chance that she would suffer injury to her spinal column. As it turned out, the operation was performed correctly, but nevertheless, the plaintiff suffered injury to her spinal column. She brought an action for negligence based solely on the ground that she had not been warned of the inherent risks of the procedure and that she would not have consented to the operation had she been so informed. It was found in fact at the trial that the surgeon failed to inform the plaintiff that the operation was not necessary and was actually optional. It was also found that while she had been warned of the risk of damage to the nerve roots, she had not been warned of the less likely, but potentially more serious, risk to the spinal column. It was also accepted that had the plaintiff been aware of these facts she would not have undergone the surgery. However, the trial judge also found that the course the surgeon had taken was backed by a ‘responsible body of medical opinion’ and therefore, applying the test formulated in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582, the standard of care that the surgeon owed the patient had been discharged. This ruling was upheld by the Court of Appeal and made its way to the House of Lords, where Dunn LJ’s quotation in the title is taken from.

The House of Lords, by applying the Bolam test, also upheld the judgment on the ground that if a responsible body of medical opinion supported a course of action, this was sufficient to discharge the duty of care owed to a patient by a doctor. However, the reasoning in the case on the issue of informed consent is very enlightening.

The first point to note is that Lord Scarman was the sole dissenting opinion in the case. Lord Scarman was of the opinion that,

‘the doctor’s duty arises from his patient’s rights. If one considers the scope of the doctor’s duty by beginning with the right of the patient to make his own decision whether he will or will not undergo the treatment proposed, the right to be informed of significant risk and the doctor’s corresponding duty are easy to understand: for the proper implementation of the right requires that the doctor be under a duty to inform his patient of the material risks inherent in the treatment.’(p. 888)

Lord Scarman’s conclusion therefore was that the law ‘recognizes a right of a patient of sound understanding to be warned of material risks save in [exceptional circumstances].

This was not however the view of the other judges. Lord Bridge of Harwich for example, gave three reasons why the imposition of such a duty on patients would not be practical under English law. The first is that it would fail to take into account the reality of the doctor patient relationship in many situations. The doctor bases his decision to follow a certain course of treatment on a variety of factors and it would be impractical to expect him to educate the patient of the full implications of all of these factors. In fact, doing so may increase the trauma and stress of some patients. Secondly, the question of whether disclosure of information should have been made in any case would be best answered by reference to expert medical opinion on a case by case basis and not as a general rule applicable to all cases. Thirdly, Lord Bridge thought it would be impossible in practice for a court to apply a subjective test to the question of what was a ‘material risk’ that a patient should have been informed of, and what was an immaterial risk that would not require disclosure. This subjective test being one put forward in the American case of Canterbury v Spence (1972) 464 F. 2d 772. The statement of Dunn LJ quoted above was firmly upheld in the House of Lords.

Sidaway however, was a case decided in 1984 and 1985. Massive advancements have been made both in the standard of medical care provided by doctors, and the requirements of the law in this field, in the intervening years. Therefore, it falls to be discussed, does the principal in Sidaway still apply?

Perhaps the best starting place for such a discussion would be to follow Lord Scarman’s approach, quoted above, of looking at the right of the patient. The first right that all of us have, dating back to the early sources of the common law, is the right to bodily integrity. This right is so ingrained in our law that it can rarely be violated, even with the victim’s consent. As Swift J stated in the case of R v Donovan [1934] 2 KB 498 at 507, when it comes to violation of the principle of bodily integrity, ‘consent is immaterial.’ Furthermore, for the most part, the motive of the violator is often irrelevant and even the good intentions of a doctor will not excuse a violation of the principle. In the American case of Schloendorff v Society of New York Hospital 105 NE 92 (NY, 1914) Cardozo J put it clearly when he said that ‘a surgeon who performs an operation without the patient’s consent commits an assault,’ This position has been affirmed in England in A-G’s Reference (No 6 of 1980) [1981] QB 715 where it was clearly asserted that it is the patient’s consent alone, and not the good motives of the doctor or any other public interest that make a doctor’s interference with the patient lawful.

However, absolute as the twin principles of bodily integrity and patient consent appear, there are a number of exceptions in practice. The law distinguishes involuntary treatment, that is treatment that the patient does not consent to, from non-voluntary treatment, that is treatment that the patient is unable to consent to because he is for example unconscious or otherwise unable to provide valid consent. One justification for non-voluntary treatment is that the patient is presumed to consent, as it is highly likely that he would have done so had he been conscious. This approach however, does not have universal academic support (Mitchell, 1995). The more favoured justification comes from the law of necessity, which recognizes the need to act in an emergency, despite the fact that the necessary consent has not been obtained (Skegg, 1974). The requirements for this exception to apply are that the patient is unable to consent, that there is no one capable of consenting on his behalf, that there is genuine urgency and that there are no known objections to treatment from the patient (In re Boyd, 403 A2d 744 (DC 1979)). The basic approach has been summed up succinctly by Lord Devlin (1962: p. 90) where he said ‘The Good Samaritan is a character unesteemed in English law.’ The principle has been developed further by the Canadian Supreme Court which has developed a distinction between procedures which are necessary and procedures which are convenient. While a doctor may be justified in performing a necessary procedure without consent, to perform a merely convenient one would be beyond what he is authorized to do.

Two colourful Canadian cases illustrate the distinction well. The first, Marhsall v Curry [1933] 3 DLR 260, concerns a case where a doctor removed a testicle during the course of a hernia operation. While the patient was naturally dismayed to wake up to the discovery, the court held that the doctor had been justified in acting as he had because of the nature of the patient’s condition and the fact that the operation could not have been regarded as successful but for the doctor’s decision. This case is contrasted with that of Murray v McMurchy [1949] 2 DLR 442 in which the doctor tied a defective fallopian tube during the course of a caesarian section. This was held to have been convenient as the woman would have been at risk, had she undergone another pregnancy, and a separate operation to tie the tube could be avoided by performing the procedure now. However, the court found that the operation was not necessary in the legal sense and therefore a breach of the patient’s right. The relevance of these cases to English law was affirmed by the Court of Appeal in Devi v West Midland Regional Health Authority [1981] CA 491 which followed the Canadian courts reasoning.

It should also be clearly noted that the consent of the patient, and the principle of patient autonomy takes precedence over any arguments of medical paternalism. This fact was stated in the two highly publicized and controversial cases of Re T (adult: refusal of medical treatment) [1992] 4 All ER 649 and Airedale NHS Trust v Bland [1993] 1 All ER 821.

Also, where a doctor acts without any consent at all, law sees this situation as appropriate for a charge of battery. This will be the case where a doctor proceeds to act on a patient, despite the fact that the patient has expressly refused the treatment (Molloy v Hop Sang [1935] 1 WWR 714). It is also the case where the doctor proceeds to provide a patient with treatment that is materially different from the treatment that the patient consented to. This was the case in Schweizer v Central Hospital (1974) 53 DLR (3D) 494 where a patient consented to a toe operation, and the surgeon subsequently operated on the patient’s back.

This is therefore. The starting position that led Lord Scarman to dissent from his colleagues in the Sidaway judgment. It is clear that the principle of bodily integrity is given the highest level of respect and protection under English law. Lord Scarman was saying that in order for a patient to exercise and enforce this right, he had to be informed of the details, risks and nature of a medical procedure. Further to this, Lord Scarman also was of the opinion that if a patient gave his consent without being properly informed of the risks and nature of the procedure he was consenting to, then this consent was in an important sense defective. This is the nature of the principle of informed consent, and requires that in order for a patient’s consent to be effective, and in order for a doctor to be able to properly act on it, the patient must have understood what he was consenting to.

Sidaway was clearly a decision that rejected the concept of informed consent. This was recognized in Canada where the courts expressly refused to follow the decision and instead opted for upholding the informed consent requirement. One example of many is that of Haughian v Paine [1987] 4 WWR 97 in which the Saskatchewan Court of Appeal decided not to follow Sidaway and instead ruled that a doctor had been negligent in performing an operation for which the patient had not been told the consequences of undergoing no treatment at all. This case followed quickly on the heals of Sidaway.

However, as late as 1997, academics in England were still confidently asserting that “English law does not recognize the doctrine of informed consent” (Grundy, 1997: p. 211). However, by this time, the attention had shifted to another principle in English law that was providing patient’s with a choice. This principle can also be traced to the Sidaway decision, the very case that rejected the application of informed consent in England. In his dissenting judgment, Lord Scarman said (at p. 884),

‘Unless statute has intervened to restrict the range of judge-made law, the common law enables the judges, when faced with a situation where a right recognized by the law is not adequately protected, either to extend existing principles to cover the situation or to apply an existing remedy to redress the injustice.’

It is this principle of the law that has been leading to significant inroads being created into the Bolam test in the context of the information given to a patient to enable him or her to make a decision. The view of Lord Bridge that it would be impractical to expect the doctor to explain absolutely everything to the patient, has in fact been flipped on its head, and the prevailing sentiment now seems to be that it would be unreasonable for the patient to explain the entire circumstances of his life, medical, social, economic and otherwise, that would be necessary to make a truly informed decision and that therefore, it is the patient who is in a far better position to make the best decision based on the information available.

Even in Sidaway a pure Bolam approach was being compromised. Both Lord Bridge and Lord Keith were of the opinion that,

‘When questioned specifically by a patient of apparently sound mind about risks involved in a particular treatment proposed, the doctor’s duty must, in my opinion, be to answer both truthfully and as fully as the question requires’ (per Lord Bridge at 898).

If one was to think about this statement in practice, it is in fact a lot more significant a compromise than it may seem. In reality, it is extremely likely that the vast majority of patients would ask their doctor a large number of questions concerning the risks and relative benefits of different courses. It would be a rare patient these days who would see a doctor, hear of a course of recommended treatment, and then accept it unquestioningly. The easy availability of medical information, and access to education and awareness of relevant issues has been promoted in the last couple of decades to the standard where patients are likely to be highly informed on their conditions and the options available to them, and they will certainly expect to engage in a frank discussion with their doctor on the courses of treatment available. It could almost be assumed, that in cases where a patient did not ask about the risks of a procedure of his doctor, either he had sufficient knowledge and consented to the doctor’s approach, or abrogated his right to further information in favour of accepting the doctor’s assessment.

The second inroad contained in Sidaway itself was asserted by Lords Bridge, Templeman and Keith to the effect that (per Lord Bridge at 900),

‘Even in a case where, as here, no expert witness in the relevant medical field contends the non-disclosure as being in conflict with accepted and responsible medical practice, I am of the opinion that the Judge might in certain circumstances come to the conclusion that disclosure of a particular risk was so obviously necessary to an informed choice on the part of the patient that no reasonably prudent medical man would fail to make it.’

Combined with the previously mentioned inroad, the two conditions together provide significant safeguards to the patient’s right to meaningfully consent. Even if the patient fails to touch on serious issues and risks in his own research, or conversation with the doctor, the doctor is also under an obligation to raise of his own initiative, particular risk that are obviously necessary for ‘an informed choice on the part of the patient.’ Without actually using the phrase, the standard that the court was setting out in Sidaway was in fact starting to sound quite close to the concept of informed consent, at least for the vast majority of cases, in practice.

As identified by Gurndy (1997: p. 213) the approach adopted in Sidaway is in fact a limited form of informed consent, ‘for it acknowledges that:

a patient’s right of decision should be recognized and respected;
where the patient undergoes an operation involving a substantial risk of grave adverse consequences a doctor failing to disclose such risk would be negligent save for circumstances where there was some cogent clinical reason why the patient should not be informed.’

Since Sidaway therefore, there have been a number of cases highlighting the importance of the patient’s right to know, and putting the Bolam test into a subsidiary role as merely one of a number of factors that should be taken into account. In Blyth v Bloomsbury Health Authority [1993] 4 Med LR 151 (per Kerr LJ at 157) it was said,

‘The question of what a plaintiff should be told in answer to a general enquiry cannot be divorced from the Bolam test any more than when no such enquiry is made. In both cases the answer must depend upon the circumstances, the nature of the enquiry, the nature of the information which is available, its reliability, relevance, the condition of the patient and so forth.’

Without creating an express right to all information that is available, the court was saying that Bolam is just one of the factors that are relevant in questions of this type. In Smith v Turnbirdge Wells Health Authority [1994] 5 Med LR 334 (per Mr. Justice Morland at 399) the court went against Bolam when it said,

‘By 1988 although some surgeons may still not have been warning patients similar in situation to the plaintiff of the risk of impotence, that omission was neither reasonable nor responsible.’

Therefore, despite passing the Bolam test, the defendants failed on the grounds of a reasonable and responsible test. In Moyes v Lothian Health Board [1990] 1 Med LR 463 the court found that the overarching test was ‘whether the doctor has shown reasonable care for the safety of his patient.’ In Abbas v Kenney [1996] 7 Med LR 47 the court stated that

‘A doctor has a duty to explain what he intends to do and the implications of what he is going to do. It must be explained in such a way that the patient can understand.’

Therefore, to conclude, it is possible to say that while the courts purport to be applying the Bolam test, as set out in Sidaway, the fact of the matter is that they are actually operating on principles much closer to a practical understanding of a modified form of informed consent. There are numerous cases that show that the mere fact that a body of professional opinion would not have disclosed certain information will not be enough for a doctor to avoid a finding of negligence. At the same time, there are numerous judicial statements to the effect that doctors must inform their patients of the basic information necessary in order for them to exercise their right to consent. Therefore, while in theory there is no doctrine of informed consent in English law, the practical approach, stemming from Sidaway and subsequent practice, is that a modified doctrine of informed consent does prevail in English law, and any doctors who ignored this fact would be standing on very shaky legal ground.

Reference List

Texts and Articles

Beauchamp & Childress, Principles of Biomedical Ethics, 3^rd ed. 1990, Cambridge

Buchanan & Brock, Deciding for Others, 1989, London

Campbell, Moral Dilemmas in Medicine, 3^rd ed. 1984, Oxford University Press

Castiglioni, A history of Medicine, trans and ed E B Krunghaar, 2^nd ed. 1947

Fulford, Moral Theory and Medical Practice, 1989, Oxford

Grundy, P., Bolam, Sidaway and the Unrecognised Doctrine of Informed Consent: A Fresh Approach, (1997) JPIL, Dec. 211

Lord Devlin, Samples in Law Making, (1962) Oxford University Press, Oxford

Mason & McCall Smith, Law and Medical Ethics, 4^th ed. 1994, Butterowrths, London

Mitchell, J., A Fundamental Problem of Consent (1995) 310 BMJ 43

Skegg, A., A Justification for Medical Procedures Performed without Consent, (19740 90 LQR 512

Cases

Abbas v Kenney [1996] 7 Med LR 47

A-G’s Reference (No 6 of 1980) [1981] QB 715

Airedale NHS Trust v Bland [1993] 1 All ER 821

Blyth v Bloomsbury Health Authority [1993] 4 Med LR 151

Bolam v Friern Hospital Management Committee [1957] 1 WLR 582

Canterbury v Spence (1972) 464 F. 2d 772

Devi v West Midland Regional Health Authority [1981] CA 491

Haughian v Paine [1987] 4 WWR 97

In re Boyd, 403 A2d 744 (DC 1979)

Marhsall v Curry [1933] 3 DLR 260

Molloy v Hop Sang [1935] 1 WWR 714

Moyes v Lothian Health Board [1990] 1 Med LR 463

Murray v McMurchy [1949] 2 DLR 442

R v Donovan [1934] 2 KB 498

Re T (adult: refusal of medical treatment) [1992] 4 All ER 649

Schloendorff v Society of New York Hospital 105 NE 92 (NY, 1914)

Schweizer v Central Hospital (1974) 53 DLR (3D) 494

Sidaway v Board of Governors of the Bethlehem Royal Hospital [1984] 1 ALL ER 1018

Smith v Turnbirdge Wells Health Authority [1994] 5 Med LR 334

“The introduction of identity cards in the UK infringes upon our human rights and civil liberties whilst actually doing very little to counter crime and terrorism” – Discuss

Contents –

Abstract

Introduction

Chapter One – Surveillance as a means of crime prevention & counter terrorism

1.1 Is surveillance needed for crime prevention?

1.2 Is surveillance needed for counter terrorism?

Chapter Two – Increased surveillance – the viability of data retention

2.1 Data retention and identity cards

2.2 Is data retention a positive thing?

2.3 The scope of data retention laws

Chapter Three – Has the introduction of the identity cards scheme served to breach individual human rights and civil liberties regarding privacy in the same way as other forms of surveillance?

3.1 The right to personal privacy

3.2 Are human rights and civil liberties effectively recognised domestically?

3.3 How far is the right to personal privacy recognised in law?

3.4 How does the ICA 2006 fit into understanding human rights and civil liberties?

Conclusion

Bibliography

The aim of this study is to consider whether the introduction of identity cards in the UK would indeed infringe upon our human rights and civil liberties, whilst also looking to determine whether it would actually be an effective way of combating crime and terrorism. Therefore, this paper will look to consider the enactment of the Identity Cards Act (‘ICA’) 2006 and the problems that are likely to arise from the introduction of the proposed scheme. Then, it will also be necessary to consider the background to the enactment of the ICA 2006 by putting this development into context with a consideration of Closed Circuit Television (‘CCTV’) and the development of data retention surveillance techniques used to gather information about people with the aim to prevent crime and counter terrorism.

However, this paper will also look to recognise the legal reasoning used to justify this kind of surveillance and information gathering that, although contrary to the recognition of the human rights and civil liberties of individuals, is considered necessary to guard the interest of society as a whole against the threat of terrorism and serious crime. But, at the same time, this paper will also recognise this kind of surveillance may actually be doing very little to counter terrorism and serious crime and is not only breaching people’s recognised human rights and civil liberties, but also criminalizing the population and breaking the law in the process. Then, finally, in summation it will be necessary to look to conclude with a balanced and logical overview of this discussion effectively derived from an understanding of the issues covered to present a reasoned view regarding this issue.

At the end of 2006, legislation was passed domestically in this country in relation to the introduction of identity cards throughout the UK in the form of the ICA 2006 as a means of crime prevention and counter terrorism. But, interestingly, in spite of its apparently noble intentions, the ICA 2006 is seen by many as only ‘enabling legislation’ that merely provides the legal framework around which the scheme of identity cards is to be developed and it does not purport to provide details of every aspect of the scheme’s overall operation^[1]. This is because the Act itself proposed the use of biometric identity cards^[2] to establish and maintain a database of information called the National Identity Register (‘NIR’) on all individuals currently residing within the UK in support of ongoing efforts to help prevent terrorism or serious crimes from occurring^[3] by allowing for an easy means to ascertain and prove an individual’s identity^[4]. Therefore, the enactment of this legislation meant both private and personal companies could access this register to confirm an individual’s identity or simply check the accuracy of their information.

However, this policy is not without its problems. This is because whilst sections 19 and 23 of the ICA 2006 only permit access to records without consent if it is in the interests of national security or for purposes connected with the prevention or detection of crime, the legislation allows for information to be added without the individuals’ knowledge with the aim of eventually having fifty pieces of an individual’s personal information on their card that would then be stored on the aforementioned database with the NIR^[5]. But despite the fact many critics argue the NIR will allow the government to monitor and record almost every aspect of a person’s life, almost all of the information listed in Schedule 1 of the ICA 2006 as being required that includes signature, photograph from a passport, name and address (both current and previous), date of birth and national insurance number for this purpose is already in the government’s possession and everyone has the right to see what information is held about them.

Nevertheless, there is a fear that ‘hackers’ are bound to attempt to gain access to the NIR database in the same way as in the US, in April 2005, when it was reported Reed Elsevier may have accidentally released the personal information of 310,000 US citizens during 59 separate criminal incidents^[6]. It is perhaps little wonder then that the scheme to be developed under the ICA 2006 has led to a great deal of criticism from various organisations. Economists, in particular, have argued that such a scheme would be excessively expensive for what they believe to be somewhat limited results in view of the fact that whilst government estimates have put the cost of the scheme’s introduction alone at around ?6 billion pounds^[7], a group of analysts at the London School of Economics consider the figure to be closer to ?18 billion that must ultimately come out of the public’s pocket through taxation^[8].

Therefore, whilst the use of identity cards brought about by the enactment of the ICA 2006 could be considered the latest advancement of surveillance technology with the legitimate aim of preventing crime and counter terrorism, question marks remain over whether this kind of policy is an acceptable tool in view of the need to recognise individual human rights and civil liberties^[9]. But this is not the first time that the legitimacy of surveillance has been called into question, despite its aims to prevent crime and counter terrorism, so it is necessary to look to consider whether the use of this kind of surveillance technology has achieved anything in this regard.

“Every man should know that his conversations, his correspondence, and his personal life, are indeed private.” Lyndon B Johnson 1908-1973 – President of the United States of America

In spite of Lyndon B. Johnson’s view ostensibly in support of Mill^[10], the use of surveillance techniques has become increasingly widespread with the passing of time because technology in this area has advanced at such a pace that even the public at large is becoming ever more aware that surveillance no longer simply refers to the work of spies in Ian Fleming novels. The word itself in French literally means ‘watching over’^[11] and, in this context, refers to all forms of observation or monitoring of another for public or private purposes. Now, however, most people are aware such techniques are used by law enforcement agencies, business and even private individual so as to gain useful information in relation to the activities of suspected criminals and terrorists where a threat is perceived leading to an eventual arrest where it is warranted^[12]. In particular they are usually most commonly aware of the use of CCTV cameras on buildings and in shops. But the use of identity cards is just another means of surveillance as its production and use will effectively act like a form of tracking whereby the authorities and private and public organisations will gain yet another insight into the private lives of individuals by creating a verifiable ‘document trail’ that the authorities can follow.

1.1 Is surveillance needed for crime prevention?

The UK leads the world in the concentration of public surveillance devices to people^[13]. This is because, about ten years ago, the UK government used ?150 million each year to develop a Closed-Circuit Television (‘CCTV’) network around the country^[14] so that the industry grew exponentially throughout the 1990’s so, by 2003, at least two and a half million cameras could be found in this country^[15] that continues to increase at around 20% per year^[16]. The ‘net effect’ is substantial. It is widely believed everyone in London is caught on camera at least three hundred times each day^[17] and very often these cameras do not just watch and record us, but also use facial recognition software to scan subjects against a criminal database^[18].

Although statistical evidence is somewhat limited in relation to the effectiveness of surveillance technology in view of the fact there is usually much more to crime prevention and counter terrorism^[19], the authorities downplay this negative element and emphasise the positive where a security issue of national significance is resolved. Such a view is effectively illustrated by the fact whilst the police review of CCTV tapes played a significant role in identifying a suspected terrorist handler involved in the bombing of King’s Cross in July 2005^[20], there remains a prevailing view that, if anything, crime levels have stayed the same or even increased despite the widespread installation of CCTV cameras.

National statistics have shown that, whilst around three quarters of the Home Office Crime Prevention budget has generally spent on CCTV, a comprehensive review has revealed the overall reduction in crime was only around 5% by 2002^[21] and has continued to make small incremental reductions nationally ever since^[22]. But as a stark mark of the success of CCTV in preventing crime, a parallel systematic review found that street lighting saw a reduction in crime of 20%, whilst CCTV cameras usefulness is then further marked against because it is understood that only around 3% of all street robberies in London are solved using CCTV footage^[23].

Interestingly, however, in Portsmouth the City Council released crime statistics for the first three months of 2008 that showed that of 1384 recorded incidents this led to 346 arrests that were recorded by the network of 172 CCTV cameras in Portsmouth and marked this out as mark of their usefulness as crime solving tool^[24], whilst, in Newham, police claimed an 11% drop in assaults, a 49% drop in burglary, and a 44% drop in criminal damage^[25] where cameras were installed^[26]. However, as well as possibly being merely an aberration in our understanding of the overall usefulness of CCTV cameras and surveillance technology as a whole, the source of the statistics is a branch of government. Therefore, unfortunately, this may mean the results have been embellished to present CCTV as being a good use of public money and, even where this is not the case, the police may have made the same number of arrests anyway so that it is somewhat surprising that the cameras have such support to enforce the law^[27].

1.2 Is surveillance needed for counter terrorism?

However, since the tragic events of 9/11 in the US, such action is also justified because it is arguable this led to the establishment of a renewed approach to surveillance in the interests of national and international security across the world. Therefore, 9/11 effectively served to reveal terrorist groups had organised themselves ‘transnationally’ – making it harder to trace them using traditional surveillance techniques^[28]. As a result, whereas in the past, terrorist groups could be readily categorised by reference to territory, this is no longer the case because, organised on a global scale, these loosely affiliated ‘cells’ can operate simultaneously in various States. This is because they are not unified by a single vertical command but horizontally^[29] by using modern communication and transportation technology, whilst the integration of financial markets also facilitates their mobility and range of targets without claiming a particular territory as ‘home’^[30].

On this basis, globally, countries realised they had a shared interest in enhancing international co-operation to fight terrorism because of the fear groups may be in possession of non-conventional weapons – such as biological, chemical and nuclear^[31]. Therefore, the international community must work together because such a threat cannot be vanquished by single States alone^[32], as the UN recognises certain States being unable or unwilling to prevent or stop the traffic of such weapons means “the ability of non-State actors to traffic in nuclear material and technology is aided by ineffective State control of borders and transit through weak States”^[33]. Clearly, the international community must hold together to find effective solutions because, although 9/11 undoubtedly showed the world that even the leading democracy was not safe from terrorist attacks.

Whereas in the past a series of diplomatic, economic and financial measures nationally to fight terrorist structures^[34], to multiply the effect of such measures, States agreed to co-operate internationally by using treaty law with around a dozen multilateral conventions on anti- and counter-terrorism^[35]. Therefore, in theory, no terrorist activity would go unpunished^[36]. But the UN has struggled since its inception to formulate an effective response. On the one hand, it has provided a solid international legal framework for combating terrorism via the adoption of terrorism-related treaties by the General Assembly and UN agencies. But, on the other hand, the UN has been unable to reach agreement on a definition of terrorism that outlaws all indiscriminate attacks against civilians and circumvents the need to recognise the human rights and civil liberties of the public at large, so more than twenty different parts of the UN system deal with terrorism in one form or another^[37].

However, in Europe it was not until the 2004 train bombings in Madrid that the EU looked to take significant action to counter terrorism and prevent serious crime. This is because those investigating the attacks in Madrid discovered telecommunications played a significant role in planning of the attacks because they were co-ordinated by mobile phone and via the Internet. Unfortunately, however, at the time of the attacks the Spanish authorities had only limited access to help to telecommunications networks in order to further their investigations when more traditional methods of surveillance associated with the aforementioned use of CCTV were somewhat lacking^[38]. This is because with the advancement of technology in this area, traditional surveillance has been made somewhat redundant by the use of Internet so that, in order to be able to effectively prevent serious crime and counter terrorism in the modern age, there is a need to utilise data retention technology.

Chapter Two – Increased surveillance – the viability of data retention

2.1 Data retention and identity cards

On this basis, the original justification for the ICA 2006 identity cards scheme was the supposed need to combat the serious problems of illegal working and identity fraud. This is because the government estimated identity fraud amounted to a ?1.3 billion annual loss to the UK economy^[39], and the government’s first consultation paper in this area specifically eschewed many of the claims for identity cards that some other advocates suggest they would bring – such as combating terrorism, benefit fraud and crime more generally^[40]. However, the draft legislation clearly presented the identity card as a device with which to combat terrorism, whilst the 2003 government’s white paper^[41] emphasised the use of identity cards as an effective tool. According to Privacy International, government ministers in the UK have argued in broadcast interviews that, although the 2001 New York and 2004 Madrid^[42] atrocities had been committed by people with valid US documents and Spanish identity cards respectively, many other terrorists use false identities and they also claimed the quality of the database underpinning the British scheme would be much higher than the Spanish.

2.2 Is data retention a positive thing?

Nevertheless, aside from the more secure nature of the identity cards scheme proposed in the UK under the ICA 2006, this kind of data retention has previously proved to be a very positive thing that has served to enhance the lives of those living within our society. As most people are aware, such technology is already being used in the form of services that text details of the closest restaurant based on a mobile phone location when your hungry, or help to pick an exit at the next roundabout when you are lost can be very useful. But any retention of collected data is also very negative because the advantages of technology come at a price, since one person’s ‘enhanced information’ can invade another’s privacy^[43]. This is because an individual’s right privacy is becoming increasingly susceptible to the advancement of technology with the introduction of ‘wiretaps’, biometrics, and video surveillance cameras all each having the potential to erode privacy^[44] in the same way as identification cards, whilst digital interactive television technology may even soon tell advertisers exactly which programs people view in their homes^[45].

Therefore, such advancements are clearly both beneficial and frightening^[46]. This is because it is commonly understood that no modern technology derived from the development of telecommunications poses a greater threat to privacy than the Internet^[47] by allowing researchers to collect data much more cheaply and efficiently^[48] because what once took a great many days hard labour can now be accomplished with a keystroke^[49]. But it is also important to appreciate that the remit of the Data Retention Directive^[50] effectively allows EU Member States to synchronise their laws so all telephony companies and ISP companies within each and every EU Member State are obliged to retain details on all electronic communications for up to two years for the purpose of investigating, detecting and prosecuting serious crimes^[51].

2.3 The scope of data retention laws

The main categories of data ‘generated and processed’ to be retained under the Data Retention Directive regarding communications are the retention of data to – (a) trace and identify its source (e.g. caller); b) identify its destination (e.g. number dialled); (c) identify its date, time and duration; (d) identify its type (i.e. network or service used); (e) identify equipment (i.e. means); (f) identify that equipments location; and (g) regarding unsuccessful calls^[52]. But this is somewhat controversial because ‘unsuccessful calls’ occur where a telephone call has successfully connected, but has not been answered^[53]. However, whilst no data regarding the content of the communications is to be retained^[54], EU Member States should also ensure data’s security is respected as a reflection of equivalent provisions for the protection of personal data in the Data Protection Directive^[55]. This is because, through measures to protect data against accidental or unlawful destruction, accidental loss or alteration, or unauthorised or unlawful storage, processing, access or disclosure^[56] of data is accessible by authorised personnel^[57].

As part of this process, EU Member States must also have measures in place to ensure any criminal access to or transfer of data retained under the Data Retention Directive is punishable by effective penalties^[58]. Therefore, the Data Retention Directive provides only data retained should be provided to the ‘competent national authorities’ in ‘specific cases’^[59], but fails to recognise which authorities are likely to be competent and the reasons why such data may be accessed. This effectively means this could lead to uneven access to data across the EU because there is no definition of ‘specifically authorised personnel’ or ‘law enforcement authorities’, but Article 9 recognises each Member State must designate one or more public authorities to be responsible for monitoring the application of the Directive regarding security of stored data.

Therefore, in the UK, the Home Office has looked to publish a set of draft Regulations in the form of the Data Retention (EC Directive) Regulations (‘Regulations’)^[60] to effectively implement the Data Retention Directive’s nature and scope^[61]. But the Regulations only looked to address the retention of certain call data by telephony companies because EU Member States can delay the Data Retention Directive’s implementation regarding traffic data for an additional 18 months until March of 2009^[62]. Nevertheless, even before they have been implemented, the UK Regulations also nothing to allay the fears raised by human rights’ advocates regarding the EU’s Data Retention Directive because the Regulations remain as unspecific and unrestrictive as the Directive. However, domestically, the authorities have “a great deal of experience with the retention of traditional communications data” because they “have been working with the industry to ensure the retention of this data since 2003, when Parliament first approved the code of practice for the voluntary retention of communications data under Part 11 of the Anti-Terrorism, Crime and Security Act 2001”^[63].

Nevertheless, whilst the retention of data was voluntary under the Anti-Terrorism, Crime and Security Act (‘ATCSA’) 2001, because it was made in response to the terrorist attacks of 9/11, its voluntary code has served as the foundation for establishing a practical framework for the enforced retention of communications data so the draft regulations provide the next step towards a mandatory framework^[64]. Such a view was supported by the fact that the EU set a high global standard in data privacy protection when it forged its Data Protection Directive^[65], which became effective in October 1998^[66], and created such a rigorous legislative approach to privacy^[67]. But the ATCSA 2001 was then amended so that the purpose of such retention became “(a) for the purpose of safeguarding national security; or (b) for the purposes of prevention or detection of crime or the prosecution of offenders which may relate directly or indirectly to national security”^[68] so the access would then be just for limited purposes.

Therefore, it is important to recognise that the UK’s Regulations have established provisions to continue with the policy of reimbursing public communications providers their expenditure from adjusting their business practices to comply with the Government’s requirements for the retention of communications data. But the interception of communications and the obtaining and disclosure of data relating to them is currently regulated by the Regulation of Investigatory Powers Act (‘RIPA’) 2000 because section 21 recognises communications data does not include the contents of the communications, but that, in the interests of national security, they may still obtain it. Consequently, the Data Retention Directive will effectively serve to augment RIPA 2000 that does not currently require the specific retention of data in advance, but the police are able to serve ‘section 22’ (‘S22’) telecommunication companies within the industry for access to the data that they retain.

Accordingly, whilst the RIPA 2000 will only permit the interception of communications in the UK by defined bodies in specified circumstances to protect individuals’ privacy, the longer the data retention period, the greater the period of access that will provided to the authorities in the interests of security^[69]. Nevertheless, ostensibly, it is to be appreciated that the RIPA 2000 is designed “to ensure that the relevant investigatory powers are used in accordance with human rights”, since it extends the legal regulation of interceptions to cover private networks that are “attached, directly or indirectly … to a public telecommunications system”, and includes “anything comprising speech, music, sounds, visual images or data of any description”. Therefore, a criminal offence is not committed in the UK if the controller of a private network intercepts a communication in the course of its transmission, but section 1(3) provides that interceptions “without lawful authority” are still actionable under the remit provided for by the HRA 1998 that is discussed below^[70].

On the basis of this understanding of data retention laws discussed in the previous chapter, it is also important to look to consider whether the scheme for identity cards proposed under the ICA 2006 based on personal data retention as a means of identification will serve to violate the recognition of individual human rights and civil liberties. This is because whilst it would clearly be hard to argue using surveillance technology to gain solid evidence for the purposes of preventing serious crime and encouraging counter terrorism is a bad thing, there is an all too prevalent need within the current climate for the striking of a balance between maintaining national security and unnecessarily invading an individual’s privacy.

In spite of their legitimate aims, the introduction of identity cards in the UK could be considered to be just the latest step in the government’s efforts to encourage crime prevention and counter terrorism at the expense of the individual rights and freedoms. This is because, in the same way as other advancements in surveillance technology, identity cards are also not without their problems. There is a prevailing feeling the use of identity cards across the nation will serve to breach individual human rights and civil liberties in the same way as many other forms of surveillance. In particular, it has been argued the use of identity cards will serve to breach individual rights to privacy because of the nature of the personal data that will be stored and retained within them and on the NIR database^[71].

Therefore, although there is little doubt the use of such technology for information gathering is very advantageous to help the government, the police, and even everyday people, question marks have arisen in relation to just how far surveillance technology should be used to monitor the public. Consequently, there is an argument those who use surveillance for the purposes of information gathering should take on certain responsibilities they must then uphold in view of the implementation of the ECHR into the UK via the HRA 1998. But in some ways technological advances have arguably hindered the recognition of human rights and civil liberties as much as they have helped crime prevention and counter terrorism by allowing the authorities an unprecedented look into people’s lives.

3.1 The right to personal privacy

The right to personal privacy is an important right, however, it is all too easily taken for granted because, like freedom, no one really appreciates its value until it is threatened, as in this case with the enactment of the ICA^[72], so that in the wake of technological advancement privacy has all too easily become an afterthought in social advancement^[73]. This is a significant failing. The right to privacy should not merely be limited to the idea an individual may live their personal life how they choose. It is also meant to include the right to establish and develop relationships with other people for the development and fulfilment of one’s own personality^[74], whilst sexual relations are the most intimate aspect of the right to a private life^[75]. However, the right to a private life also covers an individual’s physical and moral integrity^[76], encompassing protection against compulsory physical interventions and treatments^[77]. Moreover, in spite of the

“In a large number of situations both insurers and the courts recognise that the doctrine of subrogation in insurance may have unfortunate results and is wasteful. It is clear that the doctrine no longer serves any useful purpose”. Discuss.

INTRODUCTION

It has been recognised that fundamentally it is tort law that ensures compensation for loss in terms of compensation within the concept of the tortfeasor restoring loss through damages being paid to the person wronged^[1]. In terms of insurance this liability can be revealed through the idea behind third party liability, the first party being the insured, the second party being the insurer, and the third party relating to any potential for restitution needing to be paid to anybody not included within the terms of the contract who might have met some sort of loss through the actions of the insured person, eventually becoming incorporated into the law of liability.

Meanwhile, subrogation^[2] has been defined as “the substitution^[3] of one person in place of another with reference to a lawful claim”^[4] or, more simply, the recognition in law that a lawful claim may be pursued by a third party in accordance with the principles of substitution^[5]. Various types of subrogation are recognised, revealed as legal, statutory and conventional subrogation, the latter relating specifically to the terms of a contract, the legal revealed in allowing one individual to assume the rights over another and the statutory occurring as a result of the law being applied in terms of legal subrogation.

This essay, focuses on the tenets of insurance law through which the principle of indemnity is revealed through the doctrine of subrogation in terms of its conventional interpretation within its statutory framework, i.e. as a remedy in “what might be classified as unjust enrichment in a legal system that is based upon the civil law”^[6]. Subrogation originates from both common law and the laws of equity and it is also through both equity and common law that it continues to be administered, with the law of restitution recognised as a quasicontract within common law rather than incorporated into the laws of contract^[7] or the law of tort.

It has, however, become clear that this doctrine of subrogation no longer serves any useful purpose and has by been recognised both insurers and the courts that, in many situations, it may have unfortunate results and is wasteful. This essay discusses the issues surrounding the concept of subrogation and presents an argument that suggests that the function of this doctrine is, indeed, outmoded, inefficient and costly.

DISCUSSION

No Profit Rule

Any capricious risk reassigned through a contract of insurance is subject to various fundamental assumptions, one of which is the factor surrounding that risk’s arbitrary nature. Through the element of ‘utmost good faith’^[8] it is expected that the person to be insured discloses everything that could be relevant to the risk that the insurer is taking when it has agreed to insure the client^[9]. Similarly, the client may not be put at a disadvantage by any actions the insurer may undertake, with a number of regulations to ensure that the insurer adheres to acceptable practices and the insured does not, through any misrepresentation, preclude any entitlements owed to the insurer^[10]. Under the terms of the ‘made whole principle’ the insured person must be reimbursed in full prior to any profit being considered liable to the insurer, and the insurer may not implement the doctrine of subrogation until the insured person has been reimbursed in full^[11], except where a clause in the policy enables the insurer to apply the principle of subrogation when only partial payment has been made.

Nevertheless, insurers are within their statutory rights to offer a voluntary settlement to the insured person and then pursue judgment with the expectation of receiving full compensation through implementing the doctrine of subrogation against the third party’s liability insurance. However, the client may not jeopardise the trust that exists between insurer and insured by claiming more than their loss^[12], more recently the basis of a case where a Canadian Court of Appeal reduced the amount of compensation received by the Appellant, while they:

“imposed significant punishment for the bad faith of the respondent without upsetting the proper balance between the compensatory and punitive functions of tort law”.

Although in English law claiming more than the actual loss is not specifically illegal, to do so would be in breach of equitable principles and the doctrine of indemnity which assumes that the insured person would not make a profit from their loss. The doctrine of subjugation may be used in certain cases, stipulated by the courts, in order to remedy situations^[13] whereby an unjust profit had been made, in accordance with the explanation given by Lord Diplock in Orakpo v Manson Investments Ltd:

“It is a convenient way of describing the transfer of rights from one person to another, without assignment or assent of the person from whom the rights are transferred and which takes place in a whole variety of widely different circumstances”^[14].

Should the situation occur whereby the insured profits, it would be expected that they reimburse any excess to their insurer^[15]. Meanwhile, if, after both the insured and the insurer has been fully indemnified, there is excess money from the claim, the insurer is within their rights to claim it, as in the case of Yorkshire Insurance Co v Nisbet Shipping Co^[16]. Similarly, if a claim is settled in full by a third party and the money paid to the insurer, then that insurer is legally within their rights to deduct any excess from the compensation before paying the residue to the insured in accordance with the terms of their insurance agreement, as revealed in the case of Scottish Union & National Insurance Co v Davis^[17].

Evidence of Loss

The Courts tend to interpret insurance policies in accordance with those rules relating to the laws governing contracts, taking the overall context as being consistent with the actual intended meaning^[18] although, in situations where a meaning might be unclear it is usually the insured person who benefits in accordance with the doctrine of contra proferentem in terms of the guidelines of equity, although in the case of Leppard v Excess Insurance Co Ltd the actual sum awarded to the insured was reduced on Appeal as it was ruled the insured had been awarded indemnity in excess of his loss^[19]. Accordingly, and in view of the fact that insurance policies are subject to the rules of contract, it is necessary to ascertain whether the client was insured and, if so, under what terms, as revealed in the case of Sprung v Royal Insurance (UK) Ltd^[20] where it was decided that, although the plaintiff had clearly suffered a loss through the late payment of his claim, the:

“loss was recoverable in law from the defendants in addition to the interest element of the sum which had already been paid in respect of the loss under the policy”^[21].

However, the figure awarded should be in accordance with the market value of the property and, in situations where a property was incomplete, the value of the loss should reflect the market value at the time the loss occurs, illustrated by the case of Richard Aubrey Film Productions Ltd v Graham^[22] who, nearing completion of their filming, had their negatives stolen. At completion the film had an estimated market value of around ?20,000 but, as it still required further editing and other attention, thought to be around ?4,700 in value, prior to release the full market value was not considered to be appropriate. It was interpreted that compensation should be in accordance with the value of an ordinary indemnity contract, reflecting the sum a buyer would be prepared to pay for the film at the time of loss.

An overriding factor in assessing whether compensation may be payable is the legislation appropriate to each individual case, identified through either its comprehensive cover or through its specific limitations in terms of criteria. Policies need to take account for the devastation fire can cause, taking into account ‘reasonable reinstatement’ as clarified by Reynolds v Phoenix Assurance Co Ltd^[23] relating to the proposed refurbishment of an old mill. On the advice of their insurance brokers they greatly increased their indemnity. Subsequently a fire destroyed most of the building. It was established that the policyholder genuinely intended to rebuild the property and should be properly indemnified, although an issue was raised with the doctrine of undue enrichment, which was taken into account.

Remedy of Restitution

According to case law, and especially clarified by Lord Diplock^[24], it is generally an accepted principle that the rule of subrogation cannot be appropriate in every case and should be utilised reservedly for instances where it is especially pertinent and, as clarified in the case of Re TH Knitwear (Wholesale) Ltd^[25], only to the satisfaction of the courts, as in the case of Campbell Auto Finance Co v Warren in 1933^[26], and similarly in later rulings, e.g. Re Chobaniuk and Canadian Johns Manville Co Ltd^[27], although there are always exceptions. Subrogation may occur through the breach of duty or duplicity by the defendant resulting in the plaintiff being owed some form of corrective justice and recognised as a fundamental principle that profit may not be assumed through deceit^[28], or the doctrine of unjust enrichment^[29], in accordance with Lord Goff’s ruling in Lipkin Gorman^[30]:

“A claim to recover money at common law is made as a matter of right; and even though the underlying principle of recovery is the principle of unjust enrichment, nevertheless, where recovery is denied, it is denied on the basis of legal principle”.

An insurer may enter into a simple subrogation by metaphorically standing in place of the insured person^[31], after the insured person’s claim has been paid^[32], and claiming the value of the insured person’s indemnity from this third party. This claim through subrogation must, however, be undertaken in the name of the insured person to reflect the fact that liability continues even though the insured person has already been indemnified. In effect, this means that the insurer is forcing the insured person to undertake further action despite the fact that they have already received full payment. The result will reimburse the insurer to the value of that which has already been paid to the insured.

In theory, this would enable an insured person who had suffered a loss from the actions of a third person, to receive double compensation through a secondary action against the third party, the tortfeasor, as in the case of Caledonia North Sea Ltd v London Bridge Engineering Co^[33] during which the insurers were allowed to “exercise a right of subrogation and sue in the insured’s name under the contracts of indemnity”.

The perception of compensation has a dual function: the satisfaction of obtaining justice against a defendant and the plaintiff being compensated to the value of their loss. Nonetheless, debate^[34] currently surrounds the issue of deducting collateral damages that might already have been paid to the plaintiff, the intention being that the plaintiff should be left in the position they were in before the liability occurred according to the precepts of common law as ruled in British Transport Commission v Gourley^[35]. It was recognised in Parry v Cleaver^[36] that common law offers no recognition of prior benefits being deducted or not with it being left to the courts’ discretion to rule in accordance with “justice, reasonableness and public policy”^[37] and, despite the law of tort remaining at variance with any of the more updated methods of compensation, its procedures continue to be an important way of recompensing for loss with the result that collateral compensation often results in a breach of the doctrine of unjust enrichment, as revealed in British Transport Commission v Gourley:

“it is a universal rule that the plaintiff cannot recover more than he has lost…Before Gourley’s case it was well established that there was no universal rule with regard to sums which came to the plaintiff as a result of the accident but which would not have come to him but for the accident”^[38].

This ruling was later upheld in Hussain v New Taplow Paper Mills Ltd^[39] due, in part, to Lord Bridge’s view that the tortfeasor should not benefit because the plaintiff had paid insurance premiums or received other payments as the result of charity, i.e. an award of damages having a deterrent effect through the defendant having to pay compensation, highlighted in the case of Redpath v Belfast and County Down Railway^[40], although this was later superseded by British Transport Commissioners v Gourley^[41]. When Browning v War Office^[42] was heard in the Court of Appeal it was noted that:

“whether the policy of the common law in these types of actions is to provide restitution for the plaintiff or to visit retribution on the defendant?”^[43].

CONCLUSION

Insurance law does not necessarily correlate with the principles of common law, with indemnity considered to be non-deductible due to a variety of reasons, part of which appears to be a reflection on the courts’ attitude to social policy. It was ruled in the case of Caledonia North Sea Ltd v London Bridge Engineering Co^[44], i.e. Caledonia North Sea Limited (Respondents) v British Telecommunications Plc (Appellants) (Scotland) and Others^[45]:

“insurance company recoveries, under their right of subrogation, most often flow from tort actions is quite natural, but without significance. Subrogation is an equitable principle and applies to contract rights as fully as it does to tort actions… The insurer is subrogated to appellant’s contract right of indemnity. This sustains the cause of action against appellant for the identical reason that subrogation sustains a tort action where the plaintiff has been paid for his loss”

The case of Parry v Cleaver^[46], decided in the House of Lords, illustrates the incongruous situation of continuing to recognise the doctrine of subrogation in insurance, recognised by both insurers and the courts as being wasteful and no longer serving any useful purpose, with both the opportunity and the possibility of various unfortunate results emerging from this practice continuing, the concept of insurance having diminished the influence tort alone now has in terms of restitution^[47]. Insurance companies now reimburse up to 94% of all damages and 88% of all claims in tort through insurance premiums that have been pre-paid^[48].

The law of restitution or quasicontract is recognised at common law rather than contractual remedies or remedies at tort. However, evidence provided by case law suggests that the circumstances in which these remedies are applied is reliant on a specific set of principles^[49] and there appears to be considerable doubt as to the criteria for subrogation allowed to be applied, with it being suggested that applying it arbitrarily was unacceptable – it should be a “matter of principle”^[50]. The definitive case that has been acknowledged as introducing the law of restitution into case law was Moses v Macferlan^[51].

“The law of restitution is the law relating to all claims…which are founded upon the principle of unjust enrichment”^[52].

It has been claimed that ‘federal class actions have tripled over the past 10 years’ represented by a burgeoning escalation of over 1000%^[53] and is contributing to an incipient damage to the US economy with ‘litigation costs increased at four times the growth of the overall economy’^[54]. Krauss observes that the law of tort is ‘not insurance against unfortunate losses…[it]…does not exist to protect against risks’. As he clarifies, the competitive nature of the insurance industry enables premiums paid by policy holders to cover the cost of most claims^[55]. In the US this may be achieved through social insurance, welfare payments and tax law or by way of private insurance, none of which had evolved to such developments as modern society enjoys when the cases of Castellain v Preston^[56] and Darrell v Tibbetts^[57] were being heard in the Court of Appeal during the 19^th Century.

Subrogation was ruled in Darrell v Tibbetts^[58] as payment had been made for a loss which, in retrospect, was revealed not to have been a loss and, as such, the plaintiff was entitled to seek redress from the courts in order to be reimbursed for his loss. In Castellain v Preston, however, this was not the case and ultimately resulted in both sellers and purchasers, in effecting conveyance of property, to be required to insure that property against loss, an apparent example of a wasteful exercise.

The ruling made by Chitty J was on the premise that “The contract of sale was not a contract…for the preservation of the buildings insured”^[59]. However, it was also recorded that Chitty, J correlated ‘subrogation’ with “the insurers are entitled to enforce all the remedies whether in contract or in tort”, thereby paving the way to future confusion between when subrogation was an appropriate action and blurring the distinction between the law of contract, that of tort and that of quasicontract administered through common law. The case went to Appeal where Brett, LJ^[60] interpreted simple subrogation as a doctrine of subrogation interchangeable with the doctrine of indemnity.

The Law Reform Commission state that Brett, LJ ‘distorted the definition of subrogation so as to cover the case’^[61] with the effect that it has subsequently been misapplied in many other cases^[62], with its true application, equity, continuing to be incorrectly interpreted over the years as subrogation. The Commission states:

“…its long-term effect has been to introduce a confusion into the heart of the law in this area which has rendered its workings obscure and which must be stripped away before the remedies made available…to enforce the principle of indemnity can properly be understood”^[63].

This reinforces their view of sufficient welfare provision and private insurance cover to preclude the need to subrogate a claim against a tortfeasor. In accordance with this view, the doctrine of subrogation can no longer serve any useful purpose and, in view of the amount of waste in terms of litigation costs and courts’ time that results from this doctrine far outweighs its continued value or rationale.

Total Word Count (excluding bibliography and footnotes): 3,000 words

BIBLIOGRAPHY

BOOKS:

Beatson, J (2002): Anson’s Law of Contract, Oxford: Oxford University Press, Page 20.

Bird and Hird (2001): Modern Insurance Law, London: Sweet and Maxwell, Page 256

Black’s Law Dictionary, 6th Edition (1990).

Burrows, (1993): The Law of Restitution, London: Butterworths, Page 1

Goff and Jones (1998): The Law of Restitution, [5th ed]. London: Sweet and Maxwell, Page 3

Krauss, Michael I (1992): Tort Law and Private Ordering, USA: St Louis University Press

Mitchell, Charles (1994): The Law of Subrogation. Oxford: Oxford University Press, Page 4

Oxford English Dictionary, The Compact Edition ( Oxford, 1987), ii. 3126

Virgo, Graham (1999): Principles of the Law of Restitution. Oxford: Oxford University Press

ARTICLES:

Barker, (1995): Unjust Enrichment: containing the beast. In OJLS, 15, 457,473

Barker, (1998): Rescuing Remedialism in Unjust Enrichment Law: why remedies are right. In CLJ, 57, 301.

Birds, John: Contractual subrogation in insurance. [1979] JBL 124, Pages 132 – 133

Connor, Martin F (2000, October): Taming the Mass Tort Monster, In the National Legal Centre for the Public Interest, Page 4

Hasson, Reuben: Subrogation in insurance law – a critical evaluation. [1985] 5 Oxford J Legal Stud 416, Page 425 – 428

HMSO: Report of the Royal Commission on Civil Liability and Compensation for Personal Injury [UK Pearson Commission (1978, Vol. 2, para. 509) [Cmnd 7054]

Law Reform Commission CONSULTATION PAPER ON COLLATERAL BENEFITS (LRC – CP 15 – 1999) Dublin: IPC House

ONLINE RESOURCES (Site visited 25/05/05. Hyperlinks functioning)

Krauss, Michael I (2004): Medical Malpractice: is it time for Tort Reform in Maryland, USA?: The Maryland Public Policy Institute http://www.mdpolicy.org/research/health/MDMedMal.pdf

Parsons, Chris (2002): Moral Hazard and Behavioural Aspects of Liability Insurance. http://64.233.183.104/search?q=cache:VR1wzB7SfwEJ:www.nottingham.ac.uk/business/cris/ukec/2002paper5.doc+Pearson+Commission%2Binsurance%2Bclaims%2B88%25%2Btort+=en

TABLE OF CASES:

British Transport Commission v Gourley [1956] AC 185, [1955] 3 All ER 796, [1956] 2 WLR 41, 2 Lloyd’s Rep 475, 34 ATC 305, [1955] TR 303, 49 R&IT 11

Browning v War Office and Another [1960 B. No. 3080] [COURT OF APPEAL] [1963] 1 QB 750

Caledonia North Sea Ltd v London Bridge Engineering Co [2000] Lloyd’s Rep IR 249

Campbell Auto Finance Co v. Warren [ 1933] 4 DLR 509 at 515

Canadian Johns Manville Co Ltd [1969] 39 WWR 680 at 681

Castellain v Preston & Others [1881-1885] All ER Rep 493

Castellain v Preston and Others [1882] 8 QB D 613 (April 4)

Castellain v Preston and Others [1883]11 QB D 380 (March, 12)

Commercial Union Ass Co v Lister (1874)LR 9 Ch 483

Darrell v Tibbetts (Court of Appeal) 5 QB D 560

Hussain v New Taplow Paper Mills Ltd [1988] 1 AC 514, [1988] 1 All ER 541, [1988] 2 WLR 266, [1988] ICR 259, [1988] IRLR 167

Leppard v Excess Insurance Co Ltd [1979] 2 All ER 668, [1979] 1 WLR 512, [1979] 2 Lloyd’s Rep 91, 2 ILR 107, 250 EG 751, [1979] EGD 246

Lipkin Gorman (A Firm) v Karpnale Ltd [1991] 2 AC 548, 578

Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39

Morrison and Morrison v. Canadian Surety Co, n. 4 above, at 86 per Coyne, JA

Moses v Macferlan [1776] 2 Burr. 1005, 1012; 97 ER 976, 981

Napier v Hunter [1993] 2 WLR 42:

Lord Napier and Ettrick and Another v Hunter and Others and Lord Napier and Ettrick v RF Kershaw Ltd and Others [Consolidated Appeals] HL [1993] AC 713

Orakpo v Manson Investments Ltd and Others [ 1978] AC 95, [1977] 3 All ER 1, [1977] 3 WLR 229, 36 P & CR 1

Page v Scottish Insurance Corporation Ltd; Forster v Page (Court of Appeal) [1929] 33 Ll.L Rep. 134

Parry v Cleaver (House of Lords) [1970] AC 1, [1969] 1 All ER 555, [1969] 2 WLR 821, [1969] 1 Lloyd’s Rep 183, 6 KIR 265, (48 MLR 20)

Phoenix Assurance Co v Spooner [1905] 2 KB 753

Rayner v Preston (1881) 18 Ch D 1

Regal Films [1946 OCA]

Reynolds and Anderson v Phoenix Assurance Co Ltd and Others (Queen’s Bench Division) [1978] 2 Lloyd’s Rep 440 2 ILR 75, 3 ILR 51, 247 EG 995, [1978] EGD 172

Re TH Knitwear (Wholesale) Ltd [ 1988] Ch 275 at 286

Richard Aubrey Film Productions Ltd v Graham [1960] QB 2 Lloyd’s Rep 101

Scottish Union & National Insurance Co v Davis [1970] 1 Lloyd’s Rep 1

Sprung v Royal Insurance (UK) Ltd [1999] Lloyd’s Rep IR 111, (Transcript: Smith Bernal)

West of England Fire Insurance Co v Isaacs (Court of Appeal) [1895 – 1899] All ER Rep 683

Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 2002 SCC 18

Yorkshire Insurance Co Ltd v Nisbet Shipping Co Ltd (Queen’s Bench) [1962] 2 QB 330, [1961] 2 All ER 487, [1961] 2 WLR 1043, [1961] 1 Lloyd’s Rep 479

1

Figurational Sociology

The concept of figuration grew out of Norbert Elias’s best-known work, The Civilizing Process (Elias, 1939/1994). This work provided an analysis of how the European nation state emerged. It analysed social behaviour in modernity, and particularly social interactions. Split into two parts, the work first focussed on an analysis of manners to provide a description and understanding of the way in which modern norms underlying social interactions had developed. The second part of the book looked at how the nation-state had been built in the twentieth century. What Elias was most interested in, the central thesis of the book, was that it was possible for forms of social discipline – manners and social norms – to be translated into aspects of individual self-discipline (Olofsson, 2000). For Elias, then, there is a clear connection between a tendency towards state centralisation and the development of modern social manners. This is what he called the civilizing process. This essay, therefore, examines the concept of figuration, its theoretical roots in the study of court society, its modern form and the criticisms that have been levelled against it. As will be seen, the argument over the usefulness of the concept of figuration has been highly contested and strongly polarised (Featherstone, 1987).

At the heart of Elias’ work are a number of concepts – figuration is best understood within these. The concepts are interdependence, functional differentiation, self-control and power differences. Social change for Elias mostly results from the effects of functional differentiation. This is an idea shared with writers like Marx who placed the division of labour at the centre of his theory. For Elias, though, this functional differentiation leads to increasing levels of interdependence (Olofsson, 2000). Elias argued that the coercive power of societies emerges out of increasing interdependence.

This brings the discussion to the concept of figurations. In order to explain these, Elias uses the example of court society (Olofsson, 2000). He argues that in court society ‘calculation’ is an important process which individuals must engage in to negotiate with each other as the king communicates with his aristocracy. Because of changes in economic factors, many courts in Europe saw a shift of power from the aristocracy to the king. The power each member of the aristocracy had, therefore, depended on their relationship with the king. In order to survive, aristocrats had to play by certain rational rules that developed. These were based on the complex interdependency between the individuals and the fact that they were playing long-term power games with each other. An important component in playing these long-term power games was being able to control impulses. Because of the number of people in the court, the chains of interdependence were long and complicated. This required planning, attempting to predict the future and saving. Elias called this complex relationship between the king and the court a figuration. A figuration is characterised by asymmetrical power relations amongst a network of individuals. The court situation can, therefore, only be understood in terms of how the individuals relate to one another.

Four critical propositions about the figurational approach are extracted from Elias’ work by Goudsblom (1977). These are firstly that human beings inevitably exist in relationships of interdependence with each other. As a result of this interdependence, complex dynamics emerge which shape many aspects of development and change the ways in which people’s lives develop. The second proposition is that these figurations are constantly changing and being transformed. The third is that these social figurations are not essentially planned but emerge from the interdependencies. Fourth, figurations provide an important cause of the development of human knowledge.

In order to better understand the idea of figurations, Elias used various metaphors from games (Olofsson, 2000). Games are useful to analyse because the interactions between the players are not just a result of the absolute strength of each player, but of the relationship between the strengths of the two players. One example is two chess players pitted against each other. If one of them is significantly stronger than the other, then she will be able to control the manner of the victory as well as the actual victory itself. If, however, the levels of skill are much closer then the manner of victory will be much more uncertain and emerge from the interaction between the individuals. What this metaphor shows is that the power differences between two individuals have an important effect on the relationship. Chess only normally involves the relation between two players, but society obviously involves the relations between many more ‘players’, all with varying levels of power.

Shifts of power differences in society can be seen in the way the upper and lower classes interact. The lower classes have, for example, increased their level of organisation in order to increase their level of power in negotiating with the upper classes (Olofsson, 2000). One of the questions Elias wanted to address was how people continue to interact in generally peaceful ways when there is so much animosity in, for example, power relations (Loyal & Quilley, 2004). Models used to answer this question should have a number of characteristics. These are firstly that social processes cannot be analysed in terms of aggregations of components. Secondly the models work to both mould and constrain the behaviour and habitus of individuals.

The strength of the idea of figuration for Elias was that it was able to access ideas of what society was about more effectively than other methods in sociology (Krieken, 1998). Specifically it tends not to emphasise the dichotomy often present in sociological literature between the individual and society. Instead it places the emphasis on how human beings are interdependent. Society was not most usefully thought of as a totality or a whole system of individuals. Society for Elias was the way in which people interweaved with each other (Krieken, 1998). The advantage of this view was that it didn’t downplay the agency of the individual at the expense of society’s control and helped to show how people’s individuality melded together to form networks of interdependence. One important theoretical aspect of figurations that Krieken (1998) points out is that they can continue without the existence of the same individuals but they completely cease to exist if there are no individuals at all.

Krieken (1998) argues that Elias’ concept of figuration has been extremely important for sociology. One of its major strengths is the avoidance of the dichotomy between structure and agency. Although the distinction has been questioned many times in sociology, it is often still treated by sociologists as though it were real. Krieken (1998) points out that some have argued Elias’ concept of figuration should be placed alongside of the idea of structure. Mouzelis (1993) argues for avoiding abolishing this distinction. He argues for designating relations between actors in terms of figurations, relations between institutions as ‘institutional structure’ and plain structure when analysing the interaction between institution and individual. Krieken (1998) does not, however, agree with this three-way distinction. Krieken (1998) argues instead that Elias used the concept of figuration to subsume all these categories of analysis. This means that figuration includes the analysis of what is traditionally called the structure of society.

Habitus is also an important concept in Elias’ theory of figuration. Habitus refers to the idea that each individual has their own set of personal preferences, attitudes, beliefs, expectations and rules. Habitus comes from a person’s community and family experience and through their own experience of life as they grow up. For Elias, though, this habitus develops in an essentially shared manner (Krieken, 1998). Individuals grow up in society and their personal characteristics are, to a certain extent, moulded by those around them. Through this collective moulding of individuals, the nature of collective behaviour is formed. The ideas of habitus and figuration lead to a further important concept in Elias’ theory. That is that the way in which a person’s habitus is formed is called psychogenesis. This, then, can only be properly understood when it is considered in relation to social relations or sociogenesis. Theoretically and methodologically, therefore, Elias was arguing against the separation of sociology from psychology. Each has important complementary effects on the other, so it is hard to get a clear picture of the full human being if both are not considered together.

Elias’ ideas have vital implications for the way in which sociologists carry out their research. Krieken (1998) identifies two particular characteristics of Elias’ theory that are a challenge to some types of sociology. First is the focus of figuration on social relations which points to the fact that an individual cannot be analysed in isolation. Individuals can only be understood, even in isolation, argued Elias, in terms of how they relate to other people, as that is how people are formed. Thinking about humans without the relational element has a huge array of possible associated mistakes. For Elias, the analysis of power especially fell foul of the tendency to see power as a thing in itself rather than as arising from social relations (Krieken, 1998). This led, he thought, to all sort of misunderstandings. To be understood effectively, power should be seen in reciprocal terms. Elias argued that power was often analysed as though it only flowed down from above. A figurational analysis, however, also points to the reciprocal effects flowing up from below.

The second major characteristic of Elias’ theory is that it focuses on processes (Krieken, 1998). Figuration, therefore, cannot be seen as a static phenomenon, but as something that evolves and emerges over time. What had happened in sociology, however, argued Elias, was that there had been a reduction of social phenomena to particular states. Communities, families, individuals, all should be analysed as though in a state of flow, rather than statically. The use of figurations could be used to analyse these flows as long as there was not a reduction to a simple argument of causality. For example, Elias argued that a particular figuration made other, later figurations possible although it did not guarantee they would happen. Analysing society using a series of static conceptual categories, therefore, was precisely what Elias did not agree with (Rojek, 1986). Instead a process theory of sociology encourages analysis in terms of movement. This type of approach has a character quite opposed to many in sociology.

Figurational sociology can be seen as extremely useful as a reaction to six dominant paradigms in sociology (Arnason, 1987). First Marx’s work is limited by its concentration on the economic areas of life, whereas Elias’ figurational sociology is applicable to all areas. Against Durkheim’s idea of norms, Elias argued these do not represent fundamental units but rather the question should be asked in terms of power relations. For Elias, these questions should be addressed using a long-term analysis. Examining the functionalist approach, Elias found that trying to explain social structures in terms of the needs of the system was ineffective. The functionalist account is lacking because it finds it difficult to account for the fact that systems are interlinked at all levels. As has already been seen, Elias argued against a structuralist approach. The reductionist approach also had problems for Elias as society, he believed, could not be understood at this level. Finally, Elias took issue with individualism, the idea that it is possible to analyse society in terms of individual behaviour (Arnason, 1987). This is replaced by Elias with a focus on power relations and the analysis of figurations.

A number of methodological injunctions develop naturally from Elias’ theory of figurations; these are examined by Loyal and Quilley (2004). The first is that sociologists should not think about either individuals or society as in any way static or fixed. An effective analysis emerges which sidesteps arguments over macro- or micro- level explanations. A further dichotomy which Loyal and Quilley (2004) present as being avoided by Elias’ work is that of mind-body duality which has crept into sociological work. The idea of figuration draws attention to habits of language in which processes are often reduced to states. The focus of figuration, however, is on using language that has the meaning of motion and flow built into it. The danger for sociologists of automatically adopting the available language of states is a misunderstanding of the processes occurring in society. This view was influenced by the work of Whorf (1956) who argued that language fundamentally affects the perceptions of the members of the society that speak it. Finally, Elias believed that some measure of distance was required from society in order to be able to analyse figurations effectively.

A Critique of Figurational Sociology

While much of the commentary on Elias’ figurational approach discussed so far has been complimentary, his work has a number of critics. Layder (1986) argues that many of Elias’ claims about the benefits of his approach to sociology are vastly exaggerated. As a result, argues Layder, Elias tends to focus on trying to solve problems that don’t actually exist. Layder (1986) starts by considering Elias’ focus on the static categories used in language as well as the idea that positivistic notions of causation are inadequate. The concept of figuration is used to challenge these ideas by Elias. In addition, underlying Elias’ concept of figuration is the idea that it transcends long-running arguments in the philosophy of the social sciences such as that between induction and deduction and rationalism and empiricism.

Layder’s (1986) first criticism is that Elias’s figurational approach does not transcend previous approaches. One reason for this is that Elias uses only the worst examples from disciplines so that he can easily demolish their explanatory power. Elias’ critique of social psychology and psychiatry assumes that all its approaches are atomistic. It doesn’t, for example, take into account the wide variety of approaches such as those which do, indeed, focus on the effects of society on the individual and are not so atomistic. Symbolic interactionists, for example, highlight the way in which the ordinary, everyday processes of social interaction build to create what is called ‘society’. Mead (1934), an important theorist in this approach, emphasised the importance of socialisation and social interaction. For Layder (1986), then, the concept of figuration does not provide any additional explanatory power. Layder also argues that Elias does not demonstrate exactly how the idea of figurations provides a better explanation of society.

In criticising the concept of figurations, Layder (1986) argues that Elias makes a number of philosophical mistakes, some ontological and some epistemological. Layder describes figurations as generalised depictions of the social ties between individuals that Elias argues cannot be analysed outside of individuals. Figurations, though, must have some meaning outside of the interactions of individuals; otherwise it would not be possible to talk about them in an abstract sense. This is not, of course, to suggest that figurations only have meaning outside of actual interactions. For Layder, then Elias’s mistake is to argue that a figuration does not have both a manifestation as a social practice as well as existing as an idea about that particular social practice. If the ideas did not exist it would be impossible to talk about the things themselves in an abstract sense. For Layder, then, the very discussion of social practices as figurations proves that they exist outside of the actions themselves.

What Layder allows Elias’ concept of figuration is that it does provide a useful descriptive tool. Although it doesn’t transcend alternative explanations advanced by those working within structuralist and functionalist models, it can provide a useful way of examining interrelations between people. These analyses would, however, in Layder’s view, be useful in addition to those insights from structuralist or interactionist perspectives, they wouldn’t supplant them. The weakness of using the concept of figuration is that it tends to ignore actual people, in deference to their networks of social relations compared to, for example, the analysis provided by interactionism which is very much focussed on social actors themselves. In this sense, it is again difficult to argue that figuration provides an approach transcending interactionism and other schools of thought.

The second major criticism that Layder (1986) makes of Elias’s concept of figurations relates to their rejection of objectivist structures. As discussed, figurational sociology sees social processes as fundamentally fluid and avoids reductionism – Elias claims that this is an insight that helps the figurational analysis transcends other approaches. Against this idea, Layder (1986) argues that many phenomenological and interactionist schools of thought are based on the idea of social relations as a process. But, Elias does not compare his theory to these approaches, preferring to pretend they don’t exist. Instead, figuration is compared with the theory of Talcott Parsons as an example of an objectivist theory. Elias takes Parsons’ idea that society is essentially in an unchanging equilibrium and states that this is the way society is seen from an objectivist viewpoint – as a static system. In this analysis one of the mistakes Layder (1986) thinks Elias has made is to create a false dichotomy between static and fluid analysis as though there is no intermediary point. In doing this Elias claims that theories such as Parsons’ cannot explain processes, which, argues Layder, they can. Indeed, in concentrating on long-term processes, Elias does not allow an effective analysis of short-term processes.

The third major criticism which Layder (1986) levels at Elias is that the concept of figuration lacks explanatory power. Rather than helping to explain what lies behind social changes, Layder argues that it merely provides a description of what is happening. When looking for the causes of figurations, Elias presents more figurations.

Criticism of the concept of figuration has also come from Rojek (1986). In particular Rojek (1986) examines the way in which Elias talks about the accumulation of scientific knowledge. As briefly noted earlier, Elias argued that the quest for knowledge was not immune to the power of figurations. Indeed he thought it was a mistake that philosophers of the social sciences tended to make that assumed there was one model of the way science should be conducted.

One particular claim that has been made for the usefulness of figurational sociology is that it provides a link between micro and macro approaches (Mennell, 1980). Layder (2006) argues, however, that using figurations as the linking between the macro and micro approaches just serves to blur the differences between the two. The character of social relations is quite different depending on its manner – for example a face-to-face encounter is different from sending and receiving an email. Within Elias’ approach each of these would be considered aspects of figurations. Layder (2006), however, argues that each of these creates different levels of reflexivity and therefore requires a different analysis.

For Layder (2006), Elias’s figurational approach deflects attention away from a number of important factors. Institutions, for example, have important effects on the behaviour of people but this is difficult to analyse by thinking in terms of networks of connections between people. Further, when analysing social organisation in the form of groups, a figurational approach can deflect attention away from the nature of the ties between people, preferring instead to focus on their actual existence and their particular form.

A false criticism that Elias makes of sociology generally by way of his figurational approach is that not enough emphasis has been given to the interaction between society and the individual – Layder (2006) argues that this interaction is practically the founding idea of sociology. The challenge for sociology is in working out where to split the society from the individual. A problem which Elias’ work shares with sociology more generally is that a socially constructed model makes it difficult to understand the uniqueness of an individual. A complete lack of barriers between individuals leads to the conclusion that people have no individuality themselves. While it is not helpful to focus too much on the individual, it is also problematic for a complete understanding to give too little focus to the individual. Layder (2006) argues that, like extreme social constructionists, Elias’ theory of figuration is in danger of completely eradicating the individual as a legitimate object of study.

Figurational Sociology and Sport

In order to further assess the usefulness of the concept of figuration and see the benefits and criticisms in action, it is instructive to examine an example of its practical application. The principles of figurational sociology have been applied in a number of different areas, but one particularly popular area is that of sport. Figurational sociology has been used to try and understand football hooliganism, the growth of professional sport, the globalisation of sport and finally initial process of sportization (Murphy, Sheard & Waddington, 2002).

To take one example in this line of analysis, Dunning and Sheard (1979) examine the development of rugby. They explain the increased professionalism of the sport in terms of a societal move towards functional democratisation. This process leads to greater levels of competition, so that rugby players can no longer play just for fun. Instead, it is necessary to be highly committed to the sport in order to be recognised as successful. Because of the increased interconnectedness of individuals, it is no longer possible for athletes to play for themselves; instead they have to play for their countries (Dunning & Sheard, 1979). This analysis helps to explain professionalism in rugby and the advantages of a figurational approach can be seen. Societal changes are examined here in terms of figurations and this provides a useful analysis and explanation of changes.

In contrast, Murphy et al. (2002) point out that one of the criticisms of the figurational approach to sport is that it has ignored gender issues. Hargreaves (1992) argues that the figurational obsession with detachment has meant the analysis of sport has readily accepted a notion of sport as dominated by men. Even while Murphy et al. (2002) argue that this absence of the analysis of gender in figurational sociology is not a result of its theoretical limitations, from the criticisms already described the opposite can be argued. Particularly, as Layder (2006) points out, the figurational approach is weak on the analysis of the individual.

Conclusion

Elias made many claims for his concept of figuration. He claimed that it transcended previous approaches to sociology, rose above false dichotomies and helped sociologists focus on human beings as fundamentally involved in a network of interrelated relationships. Methodological injunctions also flowed naturally from Elias’ theory: e.g. focussing on processes rather than categories or states and establishing a distance between the researcher and the subject. Considering the criticism levelled at Elias’ work by Layder, however, it is difficult to see that these claims for a transcendent sociology are justified. Elias frequently misrepresented or ignored the work of sociologists he was apparently transcending as well as making serious epistemological and ontological errors. While both the advantages and disadvantages of the figurational approach can be seen in the area of sport sociology, it is hard to argue that Elias’ work stands up to Layder’s criticism. Perhaps the strongest criticism is that figuration is merely a descriptive rather than an explanatory approach. For that reason, the usefulness of Elias’ concept of figuration is limited.

References

Arnason, J. (1987). Figurational Sociology as a Counter-Paradigm. Theory, Culture & Society, 4(2), 429-456.

Elias, N. (1939/1994). The Civilizing Process: The History of Manners and State Formation and Civilization. Blackwell.

Dunning, E., & Sheard, K. (1979). Barbarians, gentlemen and players: a sociological study of the development of rugby football. London: Martin Robertson.

Featherstone, M. (1987). Norbert Elias and Figurational Sociology: Some Prefatory Remarks. Theory, Culture & Society, 4(2), 197.

Goudsblom, J. (1977). Sociology in the Balance: A Critical Essay. Oxford: Basil Blackwell.

Hargreaves, J. (1992). Sex, gender and the body in sport and leisure: Has there been a

civilizing process? In E. Dunning & C. Rojek (Eds.). Sport and leisure in the civilizing process: Critique and counter-critique. Toronto: University of Toronto Press.

Krieken, R. (1998) Norbert Elias. London: Routledge.

Layder, D. (1986). Social Reality as Figuration: A Critique of Elias’s Conception of Sociological Analysis. Sociology, 20(3), 367.

Layder, D. (2006). Understanding Social Theory. London: Sage Publications.

Loyal, S., & Quilley, S. (2004). Towards a ‘central theory’: the scope and relevance of the sociology of Norbert Elias. In: S. Loyal & S. Quilley (Eds.). The Sociology of Norbert Elias. Cambridge: Cambridge University Press.

Mead, G. (1934). Mind, Self and Society. Chicago: University of Chicago Press.

Mennell, S. (1980). Sociological Theory, Uses and Unities. London: Nelson.

Mouzelis, N. (1993). On Figurational Sociology. Theory, Culture & Society, 10(2), 239.

Murphy, P., Sheard, K., & Waddington, I. (2002) Figurational sociology and its application to sport. In: J. Coakley & E. Dunning (Eds.). Handbook of sports studies. Sage Publications.

Olofsson, G. (2000) Norbert Elias. In: H. Andersen, & L. Kaspersen (Eds.). Classical and Modern Social Theory. Oxford: Blackwell Publishers.

Rojek, C. (1986). Problems of Involvement and Detachment in the Writings of Norbert Elias. The British Journal of Sociology, 37(4), 584-596.

Whorf, B. (1956). Language, thought and reality: Selected writings of Benjamin Lee Whorf. J. B. Carroll (Ed.). Massachusetts: MIT Press

How Liberalism ideology relates to social work practice

The history and influence of Liberalism is a complex issue, and understanding social work practice involves penetrating a vast nexus of theoretical and practical socio-political factors. Nevertheless, addressing the specific question of how Liberalism relates to social work practice reveals important and distinct points for discussion. In this essay I will outline the historical developments of Liberalism and highlight the core beliefs and how they influence social work. I aim to argue that exposing the liberal ideological values inherent in social work opens up latent tensions to debate. The tensions in liberal political theory and the concomitant problems for social work don’t call for abandonment of Liberalism ideology because it has as its basis the appropriate capacity for renewal. These debates should stimulate reappraisal and reform and increase our capacity to influence the social, political and economic determinants of social care. This can be achieved due to – not in spite of – the underlying principles of Liberalism.

The historical development of Liberalism

While the editors of the Spanish Constitution in 1812 were the first to use the noun liberal in a political sense, the war of independence in America established the first nation to craft a constitution based on Liberalism. This new creed originated in the political philosophy of the previous three hundred years. Liberalism emerged from the breakdown of feudalism, the growth of market capitalism and the rise of the middle class. Liberals sought to expose the immorality of authoritarianism and limit government powers in order to safeguard civil liberties.

Where early Liberals sought total non-intervention, modern liberals endorse involved governance on issues such as welfare, education and healthcare. This has led to a split between the early classical Liberalism and the modern form which dominates contemporary politics today. Nevertheless, classical and modern Liberalism share core beliefs which point to underlying principles. These principles perpetuate every aspect of contemporary life in Western political systems. Ideas such as individualism, tolerance and economic freedom are central to the western political ideology of our times.

The core beliefs of Liberalism

‘As political beings it is our business to free human life from as many as possible of its difficulties’ (Mill Principles of political philosophy in collected works II p.943)

Liberalism holds that individuals are the locus of moral consideration, and securing individual freedom is paramount. An extreme form of liberal individualism; atomism holds that the individual is central to socio-political theory or practice, ontologically prior to society, egotistic, self seeking and self reliant. Modern Liberalism has a more optimistic bent in its understanding of social responsibility and mutual respect. Political Liberalism stresses the social contract^[1], under which citizens make the laws and agree to abide by those laws. It is based on the belief that individuals know best what is best for them. This is the characteristic theme of liberal ideology, and ideas of justice and freedom stem from the primacy of the individual.

Rationalism^[2] greatly influenced the liberal concept of an individual. The idea of a rational man was an important precursor to social non-intervention, as the rational man is capable of defining and pursuing his own path in society, rendering the idea of a paternal government unnecessary. Modern liberals appreciate the inequality of self reliance and seek to strike a balance between intervention and decentralisation.

The emphasis on and openness to reason in liberal societies emanates from the many dichotomies at its heart: On one hand natural man is seen as rational and socially conscious, while on the other egotistic and selfish. One the one hand men are capable on the other needy. This tension in Liberalism is reflected by the fact that is has met with discussion, debate and argument since its inception. A willingness to offer reasoned explanations for its theories is central to liberal ideology.

Liberalism favours neutral government, in that it is not for the state to determine personal values. As John Rawls put it in his Theory of Justice, ‘The state has no right to determine a particular conception of the good life’ (Rawls 1999). The idea of the good life has been used in political philosophy to denote a course of action the rational man takes when in favourable political circumstances. Rawls argues that liberal governments should provide these favourable conditions but never attempt to dictate how citizens should go about the acquisition of happiness. This idea of neutrality is closely connected to tolerance, and in particular the willingness to celebrate political and religious diversity.

Since the developments in economics in the late 18^th century Liberals have stressed the importance of a free markets, and seek to limit government intervention in domestic economy and foreign trade. In Andrew Heywood’s words the attraction of classical economics to liberal ideology ‘was that, although each individual is materially self-interested, the economy itself is though to operate according to a set of impersonal pressures – market forces – that tend naturally to promote economic prosperity and well being.’ (Heywood 1987) Modern liberals support government responsibility for health, education, and alleviating poverty yet still call for a market based on independent exchange and tend to believe in decentralisation.

The central tenets of modern Liberalism are the primacy of the individual, freedom, tolerance, a commitment to reason and debate, and a free-market economy. Liberalism is egalitarian; based on principles of democracy, classlessness, equality and openness, and is antonymous to oppressive and tyrannical authoritarianism. Liberalism advocates civil rights for all citizens: establishing justice though the protection and privileges of personal liberty. It includes the equal treatment of all citizens irrespective of race, gender and class. These core beliefs directly influence much of day to day life, but we will focus on the implications for the practice of social work.

Social work and Liberal ideology

Social work is a discipline involving the application of social theory and research methods to societal problems. It incorporates and uses other social sciences and political philosophy as a means to improve the human condition and positively change society’s response to these problems, through understanding and acting upon their causes, solutions and human impacts.

What constitutes a social problem? And what constitutes a solution to a social problem? In the western world the answers to these questions stem from governmental policy based on the principles of Liberalism. In a modern liberal society a social problem is one that contradicts the core liberal principles. A solution is that which removes the restrictions to people flourishing. For these reasons ideology implicit in societal interactions effects what we know as social problems and solutions.

Poverty and alienation are profound social problems and major causes of suffering in modern society. Taking poverty, Liberalism ideology believes that every individual should have the freedom to succeed economically, and not live in poverty. We have seen already that while early Liberals emphasised non-intervention, modern liberals endorse more involved governance on issues such as welfare. This reflects a central tension in the practical applicability of Liberalism ideology highlighted by Maureen Ramsey in her book what’s wrong with Liberalism? ‘Since both forms of Liberalism endorse private ownership, the economic redistribution required to tackle poverty will inevitable infringe particular individual rights to liberty’ (1997, pg66). The emphasis on individual liberty and progress at the heart of liberal capitalist economies has been accused of perpetuating this tension. Furthermore, welfare as a concept contradicts the moral neutrality that is central to the principle of tolerance in Liberalism. By providing a range of services designed to bring about the public good the state is making judgements about what is good, beyond the self seeking satisfaction of subjective desires. This leads Ramsey to conclude that ‘the provision of welfare [is] at odds with basic liberal assumptions’ (pg, 66).

Examples from social work where the right to escape poverty is being restricted could include a daughter being held back from going to school to work for her parents, or a wife not being permitted to work. Social workers’ ability to address these problems is influenced by the traditional liberal distinction between the public and the private spheres by which liberal governments should only function in the public sphere, excluding the activities of family life. Modern liberals attempt to strike a balance between intervention and non intervention. However, because of the tensions concerning the private sphere, political neutrality and accountability, this balance remains problematic. Many agree with Pateman that these restrictions render care ineffective and the areas of social work that can deal with poverty are too limited.^[3] ‘Precisely because Liberalism conceptualises civil society in abstraction from ascriptive domestic life, the latter remains forgotten.’ (Pateman, 1987 p. 107)

The liberal legacy of limited intervention and reason has resulted in an often debilitating caution concerning social work, even in the more extreme areas of its application. Taking the examples of ‘baby p’ and Victoria Climbie the social services have been accused of being too optimistic about the intentions of citizens and missing the signs that could have helped them avoid such awful tragedies.^[4] However, intuitions support the distance between the private and the public spheres. The idea of children being taken away from their parents is invariably seen as a last resort, a relaxation of this attitude may have saved many children, but it may also create other awful situations in which children are taken away from good families. It would demand more care and attention to complex detail than necessary for our purposes here to question the role of political ideology in these terrible events.

Alienation is another complicated issue facing modern liberal society. Liberal ideology does not have a core belief connected with the negativity of isolation because of an understanding of human nature that emphasises the priority of the individual. This is often seen as a deficiency as many hold that the intuitions constructed by Liberalism have produced a situation where individuals have shallower relations with other people than they would normally. This, it is argued, leads to difficulties in understanding and adapting to each other’s uniqueness. This points to another of the tensions within Liberalism: it promotes tolerance but through its emphasis on individual freedom encourages isolation. Many sociologists are concerned about the alienating effects of modernization, describing how relationships become mediated through money because economic freedom is considered an essential element of individual liberty. This has also been accused of contributing to the loss of primary relationships such as familial bonds in favour of goal oriented secondary relationships.

The concepts of the private sphere, individual freedom, tolerance and political neutrality greatly affect what we deem to be within the role of a social worker. The balance between intervention and personal freedom rests as precariously now as any time since Mill. Free market capitalism is at its weakest in decades, giving new impetus to the charge that economic Liberalism is guilty of creating a more selfish society where the pursuit of personal wealth is more destructive that constructive.

Is liberal ideology repressive?

Liberalism is accused of repressing positive aspects of human nature. To call Liberal ideology repressive though, is extreme. Liberalism allows for repressive forces to emerge due to its emphasis on individual liberty and freedom of speech and thought, but allowing repressive tendencies to emerge is not adhering to them, and liberal societies should not be blamed for the emergence of alternative ideologies within them. Social and corporate responsibility are genuine possibilities in liberal society and are prevalent in modern liberal theory.

There are problems with Liberalism, but I suggest they do not serve as aspects of a repressive ideology. We ought to remember that Liberalism emerged from the compassionate desire to eradicate authoritarian rule in order to secure freedom for every man. This is a noble aspiration with compassion for all at its core. As industrialisation and free market economies took over, the role of welfare in liberal states became important because of the same aspirations, to help every single person in a society. The change from non-intervention to intervention evidences the claim that ideologies have to adapt to contexts, and this is where Liberalism has a unique quality, a profound capacity for renewal. The classic versus modern Liberalism debate could only occur in the climate of discussion debate and argument that defined the rationalist movement. The tensions in Liberalism were inherited from this theoretical foundation and have maintained their capacity for renewal. The tensions in Liberalism reflect the scope for continual reappraisal, it is not dogmatic, and is open to public scrutiny through the democratic process. Challenges are being made and listened to within liberal society. For example, the Social liberals^[5] introduced scepticism concerning the idea of free markets, seeing unrestricted trade as leading to the growth of multi-national corporations and the concentration of wealth and power in the hands of the few, seen as contradicting the intention of liberty for all.

These socially responsible tendencies are not entirely new editions to liberal theory and in fact are latent in political Liberalism. While the early Liberals like Locke saw liberty as a natural right, Liberalism has never held that the entitlement to freedom is absolute. In On Liberty ([1859] 1972, p.73) Mill argued that ‘power can be rightfully exercised over any member of a civilised community… [If it]… is to prevent harm from others’. Liberalism emerged as a move away from blind adherence to political dogma based on static views of a divine ordered reality, towards a scientific and compassionate concern for every citizen. To conclude that Liberalism must involve repression is excessive given the underlying desire to stand for the opposite.

Conclusion.

The practice of social work in modern liberal society rests on liberal principles. By locating the connections between social work and Liberalism ideology, we have seen how practical social knowledge is influenced by liberal philosophical assumptions. These central tenets of Liberalism are liberty, tolerance, and a free-market economy. These core beliefs affect all areas of social life, including social work. The tensions that permeate the practices of liberal governments are present in the field of social work and valuable indicators of the complexity of the issues social workers face. Crucially, they are open to reform.

There are deep social problems in liberal society, of which poverty and alienation are paramount. What we can learn from these problems is that if Liberalism will succeed in its aspirations it needs to expand its scope to include more social and corporate responsibility, and a greater understanding of community. The emphasis on the individual, particularly in the economic brand of Liberalism, can repress aspects of human nature that seem central to the compassion and egalitarianism that motivated the creation of liberal theories. If empathy and care are a consequence of our social nature then we need an account of the individual as interdependent, opposed to the atomised individual of classic liberal theory.

The tensions in liberal political theory and the concomitant problems for social work don’t call for abandonment of Liberalism ideology because it has as its basis the appropriate mechanisms to progress: democracy and education, the capacity for renewal and the compassionate aspiration to secure freedom. They call for reappraisal and reform.

Bibliography

Political Ideologies an introduction Heywood, Andrew. Palgrave 1992

Liberalism and modern society Bellamy, Richard. Polity press 1992

What’s wrong with Liberalism Ramsay, Maureen. Leicester University Press 1997

A Theory of Justice revised edition Rawls, John. OUP 1999

After Virtue MacIntyre, Alasdair. Duckworth 1981

Feminist critiques of the public/private dichotomy in Feminism and inequality Phillips A (ed) Blackwell 1987.

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