3. SALUD Y BIENESTAR SOCIAL
3.1 ORGANISMOS DE SALUD
The ‘Business Decision Rule’ is a 19th Century doctrine that has developed into the cornerstone of
modern UK Company Law. Its original ideology was based upon the preposition that the courts would categorically refuse to engage in supplanting their own views on business decisions in lieu of decisions made by directors. Seeded deep within private law ideology the courts were extremely reluctant to engage in a process of second guessing the decisions of directors of a company and instead sought to allow grievances to be dealt with internally. There is no exhaustive definition of the rule and ironically perhaps for such an important doctrine it appears to stem from a single quote in Carlen v Drury. ‘[T]his court is not to be required on every occasion to take the management of every playhouse and brewhouse in the kingdom.’2 The 19th Century construct was born out of an era
of non-interventionalism by the courts in business decisions; this is highly understandable given both the political and economic ideologies of the day.
The early 19th Century saw a vast and ever-growing empire in full effect. The British Empire extended
across the globe expounded by the liberal free trade theories of Adam Smith3 and others4 of the
2Carlen v Drury (1812) 1 Ves. & B.154.
3 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. I ed. R. H. Campbell and A.
S. Skinner, vol. IIa of the Glasgow Edition of the Works and Correspondence of Adam Smith (OUP 1976). 4 See for example David Ricardo, On the Principles of Political Economy and Taxation (1817 London: John Murray).
141 | P a g e time who were suspicious of government intervention, this was combined with the belief that institutions needed to survive in an ever expanding world of competition and free enterprise. If one is to consider the role of the judiciary within this societal structure it is possible to observe the reasoning behind such a system of non-interventionalism. If we are to agree with the ideas of academics like Griffith,5 then what we can observe is a judiciary that are motivated, and directly
influenced by both the political and economic ideologies of their time. No judge sits in a glass vacuum, nor are they able to make politically neutral decisions as they are often ‘placed in positions where they are required to make political choices which are often presented to them...as
determinations of where the public interest lies;’6 if we are then to superimpose this onto the
political ideologies of the early 19th Century, we can see them to be ones of rapid growth combined
with free market thinking that sought to encourage the development of business and commerce. The utilitarian writings of Bentham7 helped to enforce the liberal ideas, and with his affirmation of
Smith and of laissez-faire, Bentham’s writings encouraged and gave voice to a growing philosophy of non-interventionalism by all facets of the state. During the same period Colderidge, whilst
ideologically opposed to Bentham, was also expounding the ideal of capitalist enterprise and criticised any interventionalist actions by the state:
‘The state, again, was no longer considered, according to the old ideal, as a concentration of the force of all the individuals of the nation in the hands of certain of its members, in order to the accomplishment by systematic co-operation. It was found that the State was a bad judge of the wants of society; that it in reality cared very little for them; and when it attempted anything beyond that police against crime, and arbitration of disputes, which are
indispensable to social existence, the private sinister interest of some class or individual was usually the prompter of its proceedings...Government altogether was regarded as a necessary evil, and was required to hide itself, to make itself as little felt as possible.’8
It was clear that at the time there was a philosophy of non-interventionalist policy within the state. It is argued that this was not the singular reasoning for the early development of the theory of the BDR, the economic reasons for this non-interventionalism ran congruently with the fact that directors during this time were ‘gentlemen amateurs’. Historically the director of a company was seen as an amateur of ‘good standing in the community,’ during the 19th Century a gentleman of
5 John Griffith, ‘The politics of the judiciary’ (5th edn Fontana Press 1997). 6 ibid 336.
7 See generally John Stuart Mill, ‘John Stuart Mill on Bentham and Colleridge’ (4th edn, Chatto & Windus London 1967).
142 | P a g e good standing would lend his name and with it his reputation to enhance the prestige of the
company. Particularly with regards to non-executive directors very little was expected in relation to the running of the company. The most evocative example of this can be seen in the case of Re Cardiff Bank (Marquis of Bute case).9 In this case the Marquis of Bute was appointed as a director
and president of the Cardiff Savings Bank at the age of six months. In the following thirty-eight years he attended only one board meeting. During this time, massive frauds occurred within the bank and in an action for the liquidator of the bank the court held that the Marquis was not liable for breach of duty in failing to attend board meetings, since he had not given no such undertaken. Sterling J remarked: ‘Neglect or omission to attend meetings is not, in my opinion, the same thing as neglect or omission of a duty which ought to be performed at those meetings.’10 His only duty was to lend
his status to the institution on whose board he was sitting.
Combining these two ideological themes we can see clearly the reasoning behind the initial development of the policy of non-interventionalism. Whilst this was clearly the policy of the time and the judges sought to distance themselves from making what had been come to be known as business decisions, they did not do so completely. As already identified the rule stems from the case of Carlen v Drury, what is interesting to note however is that this was never intended to be an absolute rule and was qualified by Lord Eldon where he noted that ‘refusal or neglect of the committee to act’ in a case of delinquency ‘clearly made out’ might raise a case ‘for prompt and immediate interference’.11 The decisions were still bound by rules of Equity and Tort.