Daphne Caruana Galizia and the rule of law: A note to law students

This post is by Dr Justin Borg-Barthet

It isn’t my job to preach to you or to teach you right from wrong.  But I will, on this occasion, explain why the skills we impart are so important.

Daphne Caruana Galizia was a Maltese journalist. I never met her, but wrote for her on a handful of occasions.  On Monday 16 October 2017, she was assassinated in a horrendous car explosion outside her home.  Her family explains that she was assassinated “because she stood between the rule of law and those who sought to violate it”.

Daphne – she is that well known in Malta; no need for surnames to identify her – was killed because she exposed corruption.  She argued that Malta had become a vassal State of criminal organisations.  She showed how the Prime Minister’s closest aides set up secret offshore companies, allegedly to process kickbacks from Azeri and Chinese dictatorships.  She showed how a bank – Pilatus Bank – was established in Malta to launder the money of politically exposed persons, and how action against the bank had been suppressed.  She revealed that the Leader of the Opposition had also engaged in money laundering; in his case as a legal practitioner acting for a transnational prostitution racket.

More importantly, Daphne saw the signs that the rule of law was being undermined.  She observed the perversion of judicial appointments, the emasculation of the police force and prosecutors, and the weakening of financial intelligence services.  She died because of what she revealed – not simply because she revealed it, but also because the violation of the rule of law results in organised crime running riot, in organised crime being enabled to commit heinous crimes against freedom of speech.

This, dear students, is where you come into the story.  As lawyers, you will be the first to note that the rule of law is being undermined.  You will be the first to see the tell-tale signs that rights are being eroded, and that systems for the protection and enforcement of rights are being reprogrammed.

Do not be complacent.  This can happen anywhere.  I too thought that I was growing up in a relatively normal country governed by the rule of law in Malta.  Change can be rapid, especially in constitutional systems which rely on trust and trustworthiness for institutional effectiveness.

If you see the signs, you will have but one choice.  You may choose, like Daphne, to stand between the rule of law and those who choose to violate it.  Or you may choose to stand with those who violate the rule of law.  There is no other choice.  You may not sit on the fence, because there is no fence on which to sit.  Those who violate the rule of law rely on a code of silence – omertà – silence is their weapon.

It’s a grave choice, and one for each of you to make for yourselves.  But remember the words of an Italian judge who was murdered by the Mafia: “they can kill one, two of us, but they cannot kill us all”.

The Malta Marriage Equality Bill: a further comment

This blog post is by Justin Borg-Barthet.

My earlier comment on the Maltese Marriage Equality Bill has prompted some discussion, including in an article in Sunday’s Times of Malta. In that article, Silvan Agius – a Maltese champion of LGBTIQ rights – responded on behalf of the Government of Malta.

Let me begin by identifying the common ground between that response and my own legal assessment. Mr Agius and I agree that a dynamic reading of fundamental rights law requires the elimination of all forms of discrimination on grounds of sexual orientation. This includes the right to marriage.

Equally, we agree that same-sex relationships should not, at law, be treated as asexual relations any more than should different sex relationships.

Contrary to his reading of my own argument, we also agree that foreign models should not be adopted blindly. Comparative law requires a critical approach to both/all relevant legal systems.

Our disagreement concerns the methods employed to achieve equality. This is a border skirmish between friends (literally and ideologically), not a fundamental dispute concerning the dignity and liberty of individuals.

‘Government could not blindly reproduce [Scots] law’

I have no brief to defend or promote Scots law. Indeed, Maltese law is, in some respects, more progressive. By way of example, civil unions are gender neutral in Malta, whereas civil partnerships are open only to same-sex couples in Scotland.

Mr Agius was setting up a straw man when he stated that Malta could not ‘blindly reproduce’ Scots law’. Nowhere was this suggested. Maltese and Scots law are substantively different and require different solutions. Legal transposition should not, in principle, constitute ‘blind reproduction’.

Furthermore, the stated reasons for rejecting the Scots law model are far from persuasive. Mr Agius’ explanation rests on two limbs, both of which are unsound.

The first limb of his argument is that ‘in Scotland, England and Wales, gay marriage was regulated by distinct laws.’ This is neither here nor there, and indeed is not entirely accurate. The Marriage and Civil Partnership (Scotland) Act 2014 amends the Marriage (Scotland) Act 1977 with a view to opening the earlier Act up to same-sex couples. The appearance of a lack of consolidation is simply a function of different legal traditions.

Furthermore, nowhere do I argue that “non-consummation should not be a ground to annul a same sex marriage”. If I had, I would indeed have been arguing “that same sex marriages are not on par with heterosexual marriages”. Mine was a criticism concerning a lack of definition. Indeed, the position in Scotland – contrary to Mr Agius’ contention – is that the notion of consummation simply is not addressed in its own right for couples of either gender-mix. The problem does not arise in the same manner.

Again, I do not suggest that this should be the position in Malta. I am simply arguing that the Maltese position is unsound. Consummation has a specific meaning which should either be changed for all couples or adapted for same-sex couples.

I was also somewhat surprised to read the Maltese government’s claim that ‘Scots law was consulted extensively’. Extensive consultation should include deep engagement with reports and consultations conducted abroad, not mere skimming of the surface. Had the Maltese government indeed consulted Scots law extensively, they would have been aware that sex was not ignored at all when marriage equality was adopted.

Far from homosexual sex being taboo, the subject was debated in some depth with a view to identifying adequate solutions. It was agreed that superimposing established opposite-sex norms concerning impotency simply could not work. This required careful consideration of sexual interactions, as opposed to sweeping this fundamental dimension of married life under the carpet, as has been done in Malta.

The decision was made to defer discussion concerning impotency for different sex couples, but to adopt a more liberal approach for same-sex couples. This was not because the legislator shied away from the reality of homosexual relationships, but because the legal ramifications had been carefully considered.

Now, Mr Agius is right to note that this has been subject to some criticism in Scotland, but it does not follow that the Maltese solution is adequate. Indeed, by retaining impotence as a ground of nullity unchanged for same-sex couples, Malta is simply choosing discrimination in practice for the sake of political sloganeering.

Abdication of Parliamentary responsibility: “The law courts will have to take into account the new realities and adapt the law to them”

The Maltese Government claims that the decision not to distinguish between the organic interactions of same-sex and different sex couples stems from a desire to preserve the unity of marriage. Yet the government response to my earlier comment contradicts this claim.

Mr Agius states that the courts will determine the meaning of impotence and consummation, in the same manner as they have done for different sex couples. If the intention is for marriage to be the same, then how will the courts reconcile the meaning of established terms with different organic realities of different sex couples? This is either a backdoor change to established definitions for different sex couples – which does not appear to be the intention of Parliament – or, it is an admission that different and same-sex couples simply cannot be regulated in the same manner.

Secondly, Mr Agius’ argument is a quite extraordinary admission that Parliament intends to leave a lacuna in the law which it expects the courts to address. To put it mildly, this is a somewhat idiosyncratic approach to the separation of powers. It is for Parliament, not the courts, to deal with the finer detail of family law policy.

But Mr Agius’ suggestion also misses a fundamental point about judicial legal development.   To the extent that courts did in fact elaborate the meaning of impotence and consummation for opposite sex couples, they had a wealth of comparable international experience on which to rely. Marriage law in Malta is, after all, derived from ecclesiastical sources. In contrast, same-sex relationships will not benefit from much international experience.

Furthermore, where there is international precedent, this is not necessarily relevant because regulation of same-sex relationships, novel as it is, differs from one jurisdiction to another. Indeed, Malta’s major parent legal systems, namely English common law, French civil law and Italian law, now regulate marriage quite differently to the contemporary Maltese approach. International precedent is simply unavailable, and Maltese same-sex couples will therefore have to rely on courts which lack the critical mass to develop solutions as predictably as one might expect.

Concluding remarks

Effectively, then my earlier suggestion that same-sex couples will be subjected to a lack of legal certainty, and in some cases to costly (both financially and emotionally) litigation remains sound. Indeed, it is implicitly confirmed by the Maltese Government that this transfer of the burden of regulation is intended by the legislator.

I remain of the view, therefore, that the Maltese legislator should engage more carefully with ongoing legal developments and consult in a greater spirit of openness. This will enable the better fulfilment of the declared aims of the legislation. It may also enable the legislator to address other unintended consequences, such as the discriminatory treatment of conversion of civil unions and marriages (while civil unions may become marriages, existing marriages cannot be converted to civil unions – a somewhat regressive approach – but more on that later…).

When non-discrimination is discriminatory: A Comment on the Maltese Marriage Equality Bill

This blog post is by Justin Borg-Barthet. It was originally posted on ‘Manuel Delia’s notes’, a Maltese political blog. It is re-posted here (with minor amendments) with kind permission.

Through the Marriage Equality Bill, Malta joins a small group of European nations which have both met and exceeded the requirements of the European Convention on Human Rights in respect of the elimination of discrimination on grounds of sexual orientation. It is particularly noteworthy that this development has met with the approval of all parties in the Maltese Parliament. This has not always been the case in other jurisdictions.

Malta also differs from its peers, however, in that it appears that political expediency has resulted in laws which have not been as carefully crafted as one might have hoped. Scots law on marriage equality, for example, developed following extensive public debate, with the benefit of significant academic input, and through careful legal drafting. The law is therefore clear, and same-sex couples are as aware of their rights and obligations as their different sex counterparts.

While Maltese law is driven by a dynamic, narrow human rights agenda, this appears to have occurred to the detriment of careful consideration of family law matters. Like the Civil Unions Act 2014 before it, the Marriage Equality Bill superimposes a heterosexual model on same-sex relationships. This is intended to achieve equality of rights, but in some cases results in a poor fit, to the detriment of same-sex couples. I will highlight two examples below, namely impotence and consummation.

Impotence

The lack of consideration for differences between heterosexual and same-sex models is most evident in relation to matters pertaining to sexual relations. In particular, the Maltese Marriage Act 1975 provides that a marriage shall be void ‘if either of the parties is impotent, whether such impotence is absolute or relative’. There is no distinction in the Maltese Bill between same-sex couples and couples of different genders.

This is to be contrasted with Scots Law, as well as the law of England and Wales. The Marriage and Civil Partnership (Scotland) Act 2014, for example, provides as follows:

For the avoidance of doubt, the rule of law which provides for a marriage to be voidable by reason of impotence has effect only in relation to a marriage between persons of different sexes.

The exclusion of impotence as a ground for nullity in same-sex relations in Scotland is motivated by the different realities of same-sex and different sex couples. The relevance of the stipulation that impotence is a ground for nullity is plain for spouses of different genders. After all, the provision was designed with them in mind.

For same-sex partners, however, it is not necessarily the case that impotence as traditionally understood is relevant to both, or indeed either, partner. Suffice it to note that intercourse between two women differs from that between a man and a woman. Similarly, intercourse between two men does not necessarily require both men’s bodies to function identically. Maltese law does not account for this.

Consummation

Equally problematic for same-sex couples is the regulation of consummation of marriage in Malta. This too differs from Scots law. In Malta, the absence of consummation within three months may result in annulment. Article 19A(1) of the Maltese Marriage Act 1975 provides as follows:

A valid marriage may be annulled at the request of one of the spouses on the grounds that the other party has refused to consummate the same.

It is especially unclear what constitutes consummation between two women, or indeed whether it is possible in the sense the law intended. Nor is it entirely clear what is meant by consummation for male couples. One might assume that penetration by one spouse of the other should constitute consummation. But it is equally arguable that one spouse could seek to annul the marriage where penetration occurred by one party but was ‘refused’ by the other.

All that is certain is that same-sex couples cannot be certain of the validity of their marriages.

Concluding remarks

The likely legal fallout could have been avoided given the successful foreign legislative models and external expertise available to the Maltese legislator. It is regrettable that it is precisely those whose rights were to be furthered who will suffer from a lack of foresight.

The resulting legal uncertainty will, of course, have no effect whatsoever on different sex couples. The law is clear in their regard. Contrary to arguments raised in the Maltese Parliament, to distinguish between different and same-sex couples is the very antithesis of discrimination. Maltese law discriminates by failing to account for differences. Same-sex couples in Malta are rendered vulnerable to a lack of foreseeability as to the meaning of the law.

It is the same-sex couples purportedly protected by identical treatment who are in fact vulnerable to a lack of certainty. It is same-sex couples who are vulnerable to spousal abuse arising from a lack of clarity in a marital contract in which the parties’ rights and duties are undefined. And it is same-sex couples who will have to suffer the emotional and financial burden of litigating points of law which the legislator appears not to have considered.

Perceptions of Corruption and Corporate Mobility: Malta as a real-time case study

This blog post is by Justin Borg-Barthet, a lecturer in EU law and Private International Law. Dr Borg-Barthet is the author of The Governing Law of Companies in EU Law (Hart/Bloomsbury 2012) and several other publications on corporate mobility. He recently formed part of a steering committee overseeing an extensive study for the European Commission on the law applicable to companies.

It is fairly well-established that cost is the primary driver for corporate choice of law and the choice of the physical location of a company’s business. Becht et al, for example, note that entry cost is the primary consideration for choice of corporate law. These authors also note that non-price factors in choice of law have been minimised through the intervention of intermediaries. Recent developments in Malta, however, suggest that non-price factors have some bearing on choices of establishment destinations in the internal market, at least insofar as they concern physical location as opposed to mere choice of law.

By way of background, following the publication of the Panama Papers, allegations concerning kickbacks have emerged involving the current Maltese Prime Minister, his chief of staff, a close aide, and a senior minister. I make no comment here on specific allegations. I am concerned, rather, with the effects of perception on inter-jurisdictional competition for incorporation and physical relocation of businesses.

Anecdotal evidence has emerged suggesting the some companies seeking to relocate from the United Kingdom to an EU-27 jurisdiction are influenced in their choices by the reputation of regulators. Hiscox Ltd, in particular, has chosen to situate its EU business in Luxembourg, having weighed up Malta and Luxembourg as its final shortlist. This cannot be explained with reference to entry cost. Operational costs in Malta are significantly lower than those in Luxembourg. Nor can it be explained with reference to familiarity with laws. Relevant Maltese laws are closely modelled on UK acts, whereas Luxembourg is of a civilian tradition. The key, instead, appears to be in Hiscox’s reference to Luxembourg’s “well-respected regulator”. It is not beyond reasonable interpretation to read this statement in its broader context; that is to say that the alternative regulator is no longer as well-respected, and that this affected choice.

Of course, this could be an isolated example. But it is consistent with the notion that choices of law and physical location are motivated by more than cost; or, more accurately, more than direct pricing. As noted by Devrim Dumladag, among others, ‘corruption in the political system is a threat to foreign investment’. It constitutes a risk which cannot be measured accurately, and which therefore cannot be accounted for with any degree of precision. Perception, therefore, is important. In 2017, Malta dropped ten places in the international Corruption Perception Index. Risk, therefore increased.

What is more, further evidence is emerging of a direct correlation between the ability to exploit the internal market and political reputation. It emerged on 14 May 2017 that, as a consequence of money laundering concerns, Commerzbank AG will no longer accept at face values audits conducted by branches of international firms situated in Malta. There have been no legislative changes in Malta which could have informed Commerzbank’s decision. The motivator appears instead to be political and administrative developments. It seems, therefore, that political branding matters.

Indeed, branding could, in principle affect not only physical corporate mobility, but also the legal fiction of mobility in the form of choice of corporate law. Drury argues, albeit in a quite different context, that a choice of corporate law – and with it the national suffix attached to a company name – affects public perception of a company. ‘Such labels give that company a distinctive national flavour in the minds of the public.’ Clearly then, it is not just the price of entry that would affect incorporation decisions, but also the associations arising from the national label which comes with incorporation.

This suggests that further evidence may emerge of downturns in the establishment of legitimate businesses under Maltese law. In other words, it is quite likely that both de facto and de jure mobility in the internal market may be affected by perceptions of corruption. While any evidence will likely be anecdotal in the absence of sustained academic investment, there is certainly some scope to qualify assumptions concerning price as a driver for corporate mobility.