Judicial Reasoning in Statutory Trust and Client Money

The case of Lehman Brothers International (Europe) (LBIE) (No 2) [2012] UKSC 6 once again exhibits the dichotomy in the use of the trust in achieving the policy objective of protecting property rights and in regulating commercial context. The split in the judgments over judicial reasoning in the interpretation of statutory trust that is imposed on client money may fail to offer coherency in doctrinal principles. Commercial pragmatism has argued that commercial context taints the quality of judicial reasoning when invoking the use of a trust. On a close examination of the judicial reasoning and principles in a comparative context reveals how statutory objective dictates the judicial reasoning. By placing judicial reasoning in case-law interpretation and case involving statutory interpretation, the process reveals that the former requires a reworking of the system that exhibits the quality of coherency depending on the compatible strength between doctrinal principles and reasoning. The case involving statutory interpretation, however, does not depend on such compatible strength. Rather, the doctrinal principle is a means to serve a governmental function or policy objective. The purposive construction gives primacy to the policy value in which that statute has an explicit interest is an example of a constraint that affects the quality of coherency in judicial reasoning.