14 No. 67 JUSTICE Where the companies contacted did not provide additional information,“OHCHR relied on desk research to assess the information received from Member States and stakeholders”16 (emphasis added). The existing list suggests heavy reliance on pro-BDS publications from NGOs such as Who Profits, and Human Rights Watch.17 On matters of law, the document contains the statement that it “is not, and does not purport to constitute, a judicial or quasi-judicial process of any kind or legal characterization of the listed activities or business enterprises’ involvement therein.”18 Based on these features, which effectively relegate its status to nothing more than a BDS placard, a fiduciary that fails to devalue it is at risk of personal liability if it then relies on it as part of the decision-making process. The “Financial Detriment” Test The second limb of the test is often treated as a tickbox exercise. BDS decisions by trustees routinely contain a statement that they, the trustees, have determined that implementation would not result in a risk of “significant financial detriment” to the portfolio. This statement is often added by lawyers for the purpose of steel-plating the decision. The debates of some BDS-leaning local authorities only serve to confirm that this is often treated in a cursory manner. They reveal a crude and simplistic measure of assessing significant financial detriment by undertaking a back-of-the-envelope exercise of comparing the negligible value of the target asset relative to the value of the overall portfolio. However, such approaches are not without risk of personal liability. First, they might be asking themselves the wrong question. There is a nagging uncertainty with the financial detriment test, widely missed in the market. The 2014 Law Commission Report articulated the second limb thus: “… the decision should not involve a risk of significant financial detriment to the fund.”19 (emphasis added) In the PSC20 decision, which concerned LGPS authorities, Lord Wilson JSC said, when talking of the Secretary of State’s anti-BDS guidance under consideration in the case, And in its text it adopts the two tests commended by the Law Commission for the taking into account of non-financial considerations: does the proposed step involve significant risk of financial detriment to the scheme and is there good reason to think that members would support taking it?”21 (emphasis added) Similarly, Lord Carnwath JSC offered the following view on the Law Commission test: That report in turn may be seen as having settled a long-running debate as to the extent to which pension trustees could take account of nonfinancial factors, dating back to cases such as Cowan v. Scargill [1985] Ch 270... There appears now to be general acceptance that the criteria proposed by the Law Commission are lawful and appropriate. I agree. Thus administering authorities may take non-financial considerations into account –“… provided that doing so would not involve significant risk of financial detriment to the scheme and where they have good reason to think that scheme members would support their decision.”22 The inconsistencies between the text considered in the judicial statements and the Law Commission test may go beyond mere semantics. The mobility of the qualifier “significant” moves the bar of the test. A financial detriment is not the same as a significant financial detriment; a significant risk is not the same as a risk. While the statement from the Supreme Court was clearly intended to approve that of the Law Commission, it also appears to be a restatement through inadvertent adoption of the wording used in the Secretary of State’s anti-BDS guidance under consideration in the case. It is difficult to see that this settles the parameters of the test. After all, the approval by the Supreme Court was by way of obiter dictum. In any event, if the phrase “significant financial detriment” in the Law Commission test is intended to be an application of the maxim de minimis non curat lex 16. A/HRC/43/71, para. 30. 17. “Analysis of the UN’s Discriminatory BDS Blacklist,” NGO MONITOR, Feb. 13, 2020, available at https://www. ngo-monitor.org/reports/un-blacklist-analysis/ 18. Supra note 16, Sec. D.19. 19. Supra note 4, para. 6.34. See also Law Commission, “Is it Always About the Money? Pension trustees’ duties when setting an investment strategy: Guidance from the Law Commission,”para 1.25, July 1, 2014, available at http:// www.lawcom.gov.uk/app/uploads/2015/03/lc350_ fiduciary_duties_guidance.pdf 20. R (Palestine Solidarity Campaign Ltd) v. Secretary of State [2020] UKSC 16. 21. Ibid., para 25. 22. Supra note 20, para 43.
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