A problem question and an essay question

What we are looking for ….

The LLM handbook gives some generally guidance on the ‘Assessment Criteria’ that are applied in marking formatives/summatives.  In addition, below are a few pointers to things to think about when answering either a problem or an essay:

 

A: ‘Problem’ Questions (based on hypothetical scenarios)

  1. It’s always important to make sure you address precisely what the question asks you. In a problem type question, this means that you must look carefully at the ‘instruction’ at the end of the question.  Some problem questions may end with a ‘general’ instruction – eg ‘Discuss’, or ‘Advise X’.  In those cases, the question is being left more open for you to decide the points the question raises, or to decide on what matters X should be advised.  However, some questions may end with a more specific and focused instruction – eg Advise X whether a) she can prevent her removal as a director; and b) whether . . . etc’.   In those cases, you must give advice specifically about (but only about) the point or points that the question asks you to give advice on.
  2. Having worked out what areas/points your answer is going to cover, you then need to identify the legal issues that are relevant in discussing/advising someone about those areas. It’s important to identify all the relevant issues in relation to the area you’re discussing, and to deal with each issue as fully as you can, before moving on to the next.  Dealing with each issue requires you to explain what the issue is, to explain what the relevant law is governing that issue, and to apply the law to the facts.  This last step is crucial: the best way we can check if you really understand the law is by seeing how well you apply the law to the specific facts of the question.  The facts will usually have been drafted in a way that tests the nuances in the law.
  3. One popular method for trying to achieve what para 2 above describes has become known as the IRAC method. The letters stand for: Issue; Rule; Application; Conclusion.  It’s a sort of checklist/order of discussion: first tell us what the Issue is that’s relevant; then describe the law – ie the relevant rule; then apply that law to the facts of the question; finally, conclude your discussion, before moving on to  the next issue.  (Keep the conclusion very brief – don’t waste words repeating things that are already clear from your ‘application’ discussion.)
  4. An example: Suppose a question included the following:

‘D, a shareholder of X Ltd, was recently appointed to be a director of X Ltd.  She was given a 4 year employment contract as a director, although this contract was never approved by the shareholders.  The company’s articles also say that D can only be removed as a director if a special resolution is passed at a meeting attended by all shareholders.  Last week, a shareholders’ meeting was held, attended by most (but not all) shareholders, at which an ordinary resolution was passed removing D as a director. …..

  1. a) Advise D with regard to the attempt to remove her as a director …’

We can identify several issues here all relevant to the attempted removal of D as a director.  Can shareholders ever remove directors?  What’s the significance of the provisions in the articles?  What difference does it make she has a four year employment contract?  Does it matter the contract was not approved by shareholders?  What’s the consequence of non-approval?  If she’s also a shareholder, can she bring any other proceedings as a result of her removal?

Having worked out that these are the issues that matter to the advice we can give D, you now need to work through them.  I’ll take just one of these issues – the significance of the articles – and suggest three different ways an answer might address this.  The first is unsatisfactory – a fail.  The second is fairly sound, but it’s not outstanding – it’s probably a low merit.  The third is very good – of distinction standard.

Fail: 

‘A company’s articles contain rules about how the company operates.  The model articles apply by default.  But this company’s articles are not legal so we can ignore them.’

  • Doesn’t really explain what the issue is.
  • Perhaps because of that, it begins with some points (about what articles are and about the model articles) which are irrelevant (irrelevant to what the issue here really is)
  • Doesn’t tell us what the rules are – just reaches a conclusion – the articles are invalid. But why?

Merit:

‘The next issue to address is the significance of the provision in the articles that requires removals to be ‘by special resolution passed at a meeting attended by all shareholders’.  It is generally agreed that a provision in the company’s articles is invalid insofar as it conflicts with a mandatory statutory provision.  So, the question here would be whether this provision in the articles conflicts with a mandatory statutory provision.  This provision conflicts with section 168 CA 2006.  S168 says that directors can be removed by ordinary resolution.  By requiring a special resolution, this regulation conflicts with section 168, and is therefore invalid.  Thus, the resolution to remove D would be valid, notwithstanding it does not comply with the company’s own articles.’

  • Clearly sets out the relevant issue
  • Tells us the rule, and then tries to apply the rule to the facts.
  • But in applying to the facts, it’s arguably a bit superficial. It doesn’t really see how the facts have been set up to test precisely how far section 168 is being infringed here- see further below.

Distinction:

‘The next issue to address is the significance of the provision in the articles that requires removals to be ‘by special resolution passed at a meeting attended by all shareholders’.  It is generally agreed that a provision in the company’s articles is invalid insofar as it conflicts with a mandatory statutory provision.  So, the question here would be whether this provision in the articles conflicts with a mandatory statutory provision.  Section 168 is the statutory provision with which the article might appear to conflict.

However, note that the article in this question has two parts: it requires a special resolution, and it also requires the resolution to be passed at a fully-attended shareholders’ meeting.  As to the first part, s168 clearly requires an ordinary resolution to be sufficient to remove a director.  The article’s requirement of a special resolution is clearly in conflict with that, and therefore invalid.  However, as to the second part of the article (requiring full attendance at the meeting), s168 does not attempt to lay down any rules about the meeting at which the ordinary resolution must be passed (apart from requiring the threatened director to be allowed to attend and speak – s169).  So, it might be argued there is no conflict between that part of the company’s article, and section 168.  We could draw an analogy here with the case of Bushell v Faith.  It ruled that a provision in the company’s articles (about how many votes each shareholder would have) likewise did not infringe [s168].   If this argument were accepted, then the vote to remove D may be invalid, not because it was only passed by an ordinary resolution, but because it was not passed at a fully-attended shareholder meeting.’

  • Like the merit answer, it clearly identifies the issues, and sets out the relevant legal rules.
  • However, in applying the rules to the facts, it has more depth. The distinguishing of the two different elements in this company’s articles allows the answer to provide a more careful, more ‘nuanced’ application of section 168 to the provision in the articles.  There is not a right/wrong answer to whether the requirement of a ‘fully attended meeting’ would infringe section 168.  The answer draws on knowledge of case law, and uses that case law to reason by analogy.