I wonder what would have happened to Mark Hotchin if he hadn't been quite so respectable, quite so upper class and quite so, well, rich

Phil Taylor at the Herald yesterday revealed Mark Hotchin's half million dollar losses in a 2002 get-rich-quick scam, a fact the courts chose to keep from the public.

In making the suppression order, District Court judge James Weir cited the reputation of the men, the financial and professional consequences and the possible consequences for their company and employees.

Hotchin's affidavit requesting name suppression is breathtaking and the judge's decision to grant it just so galling. For a start, the market system upon which our economy rests is based on theory that encourages "perfect knowledge" or "perfect information"; ie the market only works if people have a full understanding of the financial choices they're making. That a court should actively encourage imperfect information is staggering.

Hotchin's affidavit claimed that if the facts of his involvement in a ponzi scheme became known, Hanover's investment strategies would lose credibility and his reputation would be damaged; investors and third parties could conclude Hanover was a bad bet and withdraw funds; Hotchin's commercial partners would lose faith in him and request his resignation.

The point of this post is to imagine a similar but different scenario in another courtroom, perhaps one next door. In that courtroom a burglar has been himself robbed and has appealed for name suppression. His affidavit argues:

  • There would be concern over his abilities as a burglar and he would lose face and credibility within the criminal community.
  • The people who go out stealing with him, his fences and the pawn shops he supplies might come to the conclusion that if he can't protect himself from burglary, he might not be much of a burglar himself. This could cause a lack of confidence in his criminal syndicate, resulting in those he does jobs with losing their source of income.
  • Even worse, if people knew he was a burglar, they might take steps to protect themselves from him, installing locks and setting their dogs on him.
  • In these circumstances he could be shunned by the criminal community. Others in his syndicate might decide he wasn't fit to be a burglar, and so he would be unable to continue in his chosen profession.

You could argue that people had the right to know of this man's activities and questionable skills, to know the practices of the organisation he worked for, to make informed decisions, and that the evidence may well point to the fact he wasn't particularly good at his job. And you might say that's only proper if we're serious about meritocracy and market discipline and protecting the public.

You might even conclude that all the arguments made in favour of suppression are exactly the reasons it should not have been granted.

But what you'd be missing is how unfair that would be to the burglar, the poor wee lamb.

Yeah right. There are reasons for the principle of open justice, and one of them is that you should err on the side of the public good and transparency because you can never know what's round the corner. Or, you might say, there's no such thing as perfect knowledge, which is why it's vital to make public as much knowledge as you can and thereby limit the imperfections.

 

Comments (9)

by stuart munro on April 15, 2011
stuart munro

Given that the courts have now reached the absurdity of suppressing the names of dogs, it's no surprise. Perhaps we need to return to a more demotic mode of justice, where the Hotchins of this world explain themselves to a large crowd of interested parties, a tree of stout character, and an article of neckwear that prevents the user from catching cold.

by Matthew Percival on April 15, 2011
Matthew Percival

You can't seriously compare the operations of Hanover Finance with the scheme which Hotchin got into in 2002.

Like comparing apples with oranges.

by BeShakey on April 15, 2011
BeShakey

That analogy is pretty bad.  For a start Hotchin was the victim in this case, not the person found guilty.  Secondly, the judge didn't have any reason to believe that Hotchin was seeking a suppression order to protect his ability to engage in criminal activities.

I agree with you that the suppression order seems like a pretty foolish thing to grant.  But the analogy you use is pretty weak, given the argument is so strong.

by BeShakey on April 15, 2011
BeShakey

In the interests of being constructive, rather than simply bitchy, some better analogies:

An art dealer who is the victim of a poor quality forgery, who then argues for name suppression because if people found they were fooled by a forgery they might start to question their abilities and stop buying from them (or investing in their business).

A doctor who used a faith healer for their personal care who was later revealed to be a charlatan.  The doctor wants name suppression so their patients maintain confidence in them.

by Tim Watkin on April 15, 2011
Tim Watkin

BeShakey... I made the burglar a victim too, you'll note.

My point is a comparison about people before the courts system. Name suppression is seldom granted in ordinary, everday crimes. Surely it's all the more important to have transparency when the crimes are much larger.

by BeShakey on April 15, 2011
BeShakey

Sorry Tim, missed that bit.  Nonetheless, while I agree with your overall point, I think the waters are a bit muddied by the fact that your hypothetical burglar wants name suppression to aid his future illegal actions while, Hotchin wanted name suppression to aid him in his ongoing legal activities (at least as far as the judge knew at the time).

IMO the overall question is - should knowledge of your incomptence in your business dealings be suppressed because it would have a negative effect on your business?  My opinon (the same as yours) is that the answer is no.  But thinking about it more I wonder if it isn't more complicated.  I can imagine a case involving a prostitute who gets beaten up because of her inability to satisfy, who wants her name suppressed because it would effect her (or his) business.  That case seems less clear cut to me, although the principle seems the same.  Perhaps the fact Hotchin is such a prick, coupled with the desire for people hurt by him to have known is colouring this?

by on April 17, 2011
Anonymous

In this instance is it a question for the court system to ask was justice delivered to the investers since 2002.

by Deborah Coddington on April 19, 2011
Deborah Coddington

And, Tim, what about the outrageous situation where an inner city barrister, quite an eminent one at that, applies successfully to have her drink-driving case heard out at Waitakere and gets name suppression because she wants to be a QC, and one day a judge?

Do you suppose she would have successfully obtained name suppression for so long if she had been, for argument's sake let's say, a hooker on Hunter's Corner who one day wanted to be a sex worker in a brothel, and one day a madam?

We know who she is anyway. What a farce.

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