Review of The Law of Banking in Scotland (Crerar)
Lorne D Crerar
ISBN: 0 84592 151 4
The first edition of Lorne Crerar’s book on Scots banking law was published in 1997. As there have been significant legal changes in the last 10 years, it is valuable that he has updated his book. For instance, the Abolition of Feudal Tenure etc (Scotland) Act 2000, the Bank of England Act 1998, the Consumer Credit Act 2006, the Financial Services and Markets Act 2000, the Mortgage Rights (Scotland) Act 2001, as well as new case law have now been taken into account. In the appendices of the book there are also the new versions of the Banking Code and Business Banking Code.
In the second edition a new chapter on corporate finance has been included (pp 401-431). This chapter provides a good introduction into the subject. However, there is the problem that from October 2008 the Companies Act 2006 will replace the Companies Act 1985, and thus many statements will soon be outdated. Furthermore, corporate finance heavily depends on financial markets law, which is not discussed in Crerar’s book in detail.
Regarding the scope of the book, it also has to be noted that its main focus is on private banking law. The important topics of banking licences, capital adequacy and money laundering are only addressed on a few pages (pp 32, 69, 71, 214). Readers interested in these topics – which are fairly uniform in the UK – may therefore need to consult other books.
This leads to the general question why a book about the specific Scots law of banking is necessary. This is not an obvious one, since in some areas of commercial law the law is largely uniform in the European Union (for instance, in financial markets law) or, at least, in the United Kingdom (for instance, in company law). With respect to banking law, there has been some European influence, which is also mentioned in Crerar’s book (e.g. pp 66-73, 485-487, 508-509), and there is also some uniformity between England and Scotland. However, as the main focus of the book is on private banking law, there is indeed a case for a specific Scottish book. As contract, delict, unjustified enrichment and property law differ between Scotland, England and other European countries, it is the main strength of this book that it provides a detailed and clear description of how Scottish private law is applied in the context of banking.
The dynamic of banking law makes the subject particularly interesting. However, for anyone who is writing about it, there is the problem that after a few years legal changes may have weakened the usefulness of a particular book or article. This could also become a problem for Crerar’s book, because new Acts and directives are about to come into force. The Companies Act 2006 has already been mentioned. Reference can also be made to the Bankruptcy and Diligence etc (Scotland) Act 2007. Finally, a number of European directives will soon have an impact on the laws of the member states. This concerns in particular Directive 2006/48/EC relating to the taking up and pursuit of the business of credit institutions, Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions, the Directive on a New Legal Framework for Payments (which has just been approved by the European Council), and possibly also a new Consumer Credit Directive. One should therefore hope that the third edition of Crerar’s book will be published earlier than in 10 years’ time.
Mathias M Siems, Reader in Commercial Law, University of Edinburgh