Does everybody in the financial services industry fully understand the concept of agency law and how it might affect the way they conduct their business and earn their money? The issue could surely not be more pertinent than today, when even the most hardened supporters of capitalism (of which in general I count myself one) have been badly shaken by the unfolding revelations of how the financial world lent and traded its way into the current global mess.

Having confessed to feeling outraged by the recent behaviour of many banks, a prominent barrister of my acquaintance recently sent me a judgment from the Court of Appeal that lays out, with splendid clarity, the principles that the law applies to anyone who acts as – and is paid to be – an agent of another person. The implications should not, one hopes, be lost on anyone who acts for clients in financial services.