CHAPTER PREVIEW

Most psychological research poses little physical or psychological risk to participants or involves few serious ethical issues. Nonetheless, because some researchers in the past have conducted notorious and unethical projects, laws and guidelines have been developed for the protection of research participants. Another problem is that researchers have made up data, invented entire experiments, and misrepresented their data in published journal articles.

Researchers generally become very interested and excited in their programs of research. Sometimes this means that they focus very narrowly in their work and forget to consider the implications of what they are doing. In this chapter, you will see that investigators may get so caught up in their research that they may endanger the people who participate in their studies.

The American Psychological Association has developed a set of guidelines that has evolved over the past half century. Many researchers in disciplines other than psychology rely on these guidelines. We must also follow legal requirements that federal and state governments have enacted for the protection of human participants in research.

Students sometimes mistakenly believe that the APA approves or vetoes research. It would be impossible for any single organization to oversee as much research as psychologists conduct. Ethical supervision occurs under the oversight of Institutional Review Boards (IRBs) that evaluate proposed projects; this takes place in the colleges and universities where the research is carried out.

In discussing ethics in psychological research, the famous research of Stanley Milgram (1963) and Philip Zimbardo (1972) comes to mind. Milgram's research participants thought they were delivering electrical shocks to another person, often to the extent that the other person might have died. Zimbardo created a prison simulation that led participants, all of them students, to treat one another very brutally. This type of research is very rare in psychology, which is why the most illustrative examples of ethically controversial research occurred over 30 years ago.

We can categorize research in two groups for our discussion. In one category, involving clinically based research, the result of ignoring ethical dictates is potentially very serious. People approach clinical psychologists because of problems that need to be resolved. If clinical research involves ethical problems, those people could be seriously harmed.

Introduction

Concerns about over-population trace back to Babylonian times. Babylonian mythology was first recorded in about 1600 BC and those inscribed tablets reveal the gods’ annoyance at multiplying humans and their noisy ways. Plagues, floods, and finally infertility were supposedly inflicted on humans to control their numbers and leave the gods in peace and quiet (Cohen 1995: 5–6). The idea that natural catastrophes would provide a check on human populations is more commonly associated with the eighteenth-century writings of English cleric Thomas Robert Malthus. While many of his contemporaries were engaging in ‘speculations about the perfectibility of man and of society’ (Malthus 1798: 3), Malthus could not share their optimism. Instead, he focused on the ‘unconquerable difficulties’ in realising their rosy pictures of the future. He was mostly concerned about a tension he saw in two fixed laws of nature: one, the necessity of food for man's existence, and two, the ‘passion between the sexes’ (1798: 4). These laws exist in tension, he argued, because food and population cannot possibly grow at the same rate: ‘Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio’ (1798: 4). Without any social controls on population growth, the natural world imposes its own limits in ways that produce significant human suffering: families are forced to abandon children, and disease, malnourishment, and ultimately famine would suppress procreation and eliminate vast numbers.

An ever increasing population simply could not be sustained on a planet with finite limits. Malthus contemplated the possibility that liberal, educated men of limited financial means would avoid or delay marriage to avoid sharing their wealth and descending the social ladder. Fewer marriages would, in that era, necessarily mean fewer births (1798: 24–5). But the vast majority of men could not be relied upon to exercise such judgment or restraint. So minimising marriages could provide only a limited social check on population (1798: 24–5). Recognising their limited means, poorer people might prudently limit their family size. But Malthus observed that this was rare. Indeed, he rejected the ‘Poor Laws’ on the grounds that child support payments to poor labourers would further discourage smaller families. So although it might improve the condition of the poor in the short term, it would lead to scarcer resources in the long term (1798: 42).

CHAPTER PREVIEW

You probably know a great deal about people and some interesting and important facts about psychology, but you probably know relatively little about psychological research. This book will show you how research helps you learn more about people from a psychological point of view. You can be certain of one thing: There are no simple explanations.

When you read through this chapter, you will learn that there are different ways of knowing about behavior. As a beginning psychologist, you will get a glimpse about why some types of knowledge are more useful than others. In addition, you will see that people can be resistant to changing what they believe. For instance, a lot of people believe in ESP or other paranormal phenomena, even though the scientific evidence for it just isn't there. One reason for such beliefs is that most people don't approach life the same way that scientists do, so the evidence they accept is sometimes pretty shaky.

Finally, this chapter will introduce you to some of the cautions you should be aware of when you read about psychological research in the popular media. Journalists are not scientists and scientists are not journalists, so there is a lot of potential for miscommunication between the two.

Why Are Research Methods Important Tools for Life?

The great thing about psychology is that people are both interesting and complicated, and we get to learn more about them. As you learn more, you will see that there can be a big difference between what we think we know about behavior and what is actually true. That is why you need this course.

Your course on research begins the process of learning about how psychological knowledge emerges. This knowledge can be useful when applied to people's lives. For instance, even four years after a domestic terrorist destroyed a federal building in Oklahoma City, killing 168 people, about half the survivors were still suffering from some kind of psychiatric illness (North et al., 1999). This pattern mirrors the effects of the terrorist attacks in the United States in 2001, the devastation and hurricane damage in Louisiana in 2005, and the experiences of many soldiers in combat in Iraq and Afghanistan, indicating the critical need to provide effective treatments (Humphreys, 2009).

Introduction

Most of the chapters in this book focus on how states, multilateral institutions, and corporate actors have responded to global environmental problems. We have seen that civil society groups often play an important role in shaping the decisions and actions of these state and corporate actors. But in this chapter, civil society – and social movements in particular – moves to centre stage. Social movements are defined as ‘collective challenges, based on common purposes and social solidarity, and sustained interaction with a common opponent and authorities’ (Tarrow 2011: 9). Social movements are often not central to studies of global governance or domestic politics, but to ignore them risks overlooking the central role they have played in bringing about progressive change since the late eighteenth century (Fominaya 2014: 4). In Chapters 6 and 7 we saw how contemporary global environmental governance is characterised by a commitment to the liberal economic system; this predicates environmental protection on existing systems of international trade, capitalist accumulation, and economic growth. Social movements from the North and South have fiercely resisted this approach. Through repertoires of protest and experimental practices, social movements have challenged the principles and assumptions that underpin unsustainable practices and ‘liberal environmentalist’ policies. In this chapter we explore how this resistance has manifested in the context of unsustainable agriculture.

The chapter begins with an overview of resistance, touching on questions of definition and strategy before briefly reviewing how movements have resisted neoliberal economic globalisation and neoliberal environmental projects. We then pick up the case study of unsustainable agriculture by first charting the rise of the modern industrialised agricultural system, and then unpacking the relationship between environmental change and modern agriculture. Here we examine the various ways in which industrialised agriculture is both implicated in and vulnerable to climate change and environmental degradation. Concerns about the environmental and social impacts of the modern agricultural system have motivated social movements to demand far-reaching reforms to agricultural and trade policies, and to develop alternative practices of sustainable agriculture based on agroecology and the localisation of food production and trade. We examine this demand-based resistance and action-based resistance and explore a set of prominent case studies to more deeply understand what resistance to unsustainable agriculture looks like in practice.

CHAPTER PREVIEW

In the previous chapters we introduced probability as the foundation for testing differences between two treatments. We then described how the independent t test allows us to determine if statistically significant differences are present between two groups receiving two different levels of an IV. Similarly, the repeated measures t test allows us to use a more sensitive analysis to examine differences in treatments using one group of subjects who experience both conditions. In this chapter we expand the probability model for testing statistical significance to include more than two levels of the IV. We explain how we can use an Analysis of Variance (ANOVA) to test for statistical significance when we have more than two groups or when participants experience more than two treatment conditions.

A between groups ANOVA is an inferential test of probability that we can use with one independent variable having more than two levels. In addition to determining whether groups differ as a function of the level of the independent variable, we must conduct additional statistical tests to determine where, exactly, the differences exist. We conduct post hoc analyses to isolate specific differences when we have more than two groups. We also derive an overall measure of effect size as an estimate of the strength of the treatment effect.

In most ways, a repeated measures ANOVA is much like the between groups ANOVA. The difference between these two inferential statistical tests is whether different groups receive the levels of the independent variable, or if one group of participants experiences all of the conditions, or levels, of the independent variable. The repeated measures ANOVA is more sensitive to detecting a statistically significant outcome because there is less error. So, when we find a statistically significant outcome, we also conduct post hoc analyses and calculate a measure of effect size.

Statistical Testing for Multiple Treatments

Thus far, our discussion of statistical analyses has been limited to comparing two levels of an independent variable. In the previous chapter, we used an example comparing two treatments for depression (i.e., treatment and control group), and we measured the effectiveness of the treatment using the Beck Depression Inventory (BDI-II). However, we frequently encounter research questions that include more than two levels of treatment.

A first legally structured insolvency procedure with some potential for rescue is receivership. This chapter will look at receivership as a process as well as an institution. The laws, procedures and actors involved in receivership will be examined and the benchmarks of efficiency, expertise, accountability and fairness will be employed in asking whether receivership plays an acceptable role in insolvency as a whole. The part played by receivers in rescues will be a focus here, but attention will also be paid to ongoing corporate operations and the impact of receivership on these.

It might be objected that administrative receivership has largely been abolished and so does not need to be examined here – that the Enterprise Act 2002 took away the floating charge holder's right to appoint an administrative receiver and, in doing so, largely replaced receivership with administration. It is true that the 2002 Act restricted the use of administrative receivership, but receivership is not dead yet. Creditors with ‘qualifying’ floating charges that were created before the 2002 Act, or those with charges which, though created after that date, fall within one of the specified exceptions may still appoint administrative receivers. ‘Ordinary’ or non-administrative receivers, moreover, can still be appointed by the courts and debenture holders. Receivership also has potential usage beyond the confines of insolvency law. It is, accordingly, necessary to consider the operation of receivership and the reasons for its curtailment. This discussion is best commenced by outlining the development of receivership, the procedures that are adopted in receivership and the duties and obligations that form the legal framework for receivership.

The Development of Receivership

Receivership is a long-established method by which secured creditors can enforce their security. There have traditionally been two types of receiver in English law: the receiver appointed by the court and the receiver appointed by a debenture holder under the terms of the debenture deed. The ‘administrative receiver’ was an institution introduced by the Insolvency Act 1986 and is covered by a distinct statutory regime. The receiver is thus a person appointed to take possession of property that is the subject of a charge and he or she is authorised to deal with it primarily for the benefit of the holder of the charge.

This chapter looks at the statutory arrangements that companies may voluntarily enter into so as to deal with troubles or adapt to changes in market conditions. The two main procedures for effecting voluntary arrangements either within or outside administration or liquidation are schemes of arrangement under section 895 of the Companies Act 2006 and Company Voluntary Arrangements (CVAs), as provided for in Part I and Schedule A1 of the Insolvency Act 1986.

Before looking at these two methods, it should be emphasised that informal arrangements made contractually can, as noted in chapter 7, provide very useful ways of attempting rescues before there is need to resort to the formalities of section 895 or CVA provisions. Informal steps, moreover, may be taken confidentially and, in the international context, may provide a useful way of negotiating between different insolvency systems. Such contractual steps, however, possess a number of weaknesses. They are only binding on contracting parties and cannot tie dissenting parties to an agreement. They offer no form of moratorium to shield the company from its creditors and, even if approved by meetings of creditors and members, offer no protection from the enforcement of claims. Informal procedures may also lend themselves to domination by large secured creditors in a way unmatched by CVAs and section 895 processes.

Schemes of Arrangement under the Companies Act 2006 Sections 895–901

The roots of the scheme of arrangement lie in Victorian legislation but, as set out in the Companies Act 2006, the process allows a ‘compromise or arrangement’ to be agreed between a company and ‘its creditors, or any class of them’. An arrangement here may include a reorganisation of share capital by the consolidation of shares of different classes or by the division of shares into different classes. Such schemes are commonly used to effect compromises and moratoria with creditors, or to restructure debts, and schemes with policy holder creditors of insurance companies have also been common. They are also used in takeover and merger transactions and in reorganisations of rights allocated to classes of shares or debt, often where the articles or instruments constituting the capital are inadequate.

Eight years have elapsed since the previous edition of this work. During that period a number of landmark events have occurred.

The global financial crisis has impacted on the commercial environment and has produced some spectacular corporate insolvencies across the globe. Lehman Brothers led the roll-call of casualties in September 2008 when it entered US Chapter 11 bankruptcy and triggered a tidal wave of insolvencies in its local subsidiaries across the globe. A dramatic increase in UK corporate insolvencies might have been expected in the wake of that global economic downturn. That has not happened. The statistics indicate a fall by a third between 2008 and 2015, with corporate insolvencies in England and Wales declining steadily from 21,811 to 14,600.

What explains this lack of business failures, particularly when the number of registered companies continues to rise? Firstly, many of the weaker businesses may have gone to the wall just prior to the 2008 crash. Secondly, many distressed businesses may have been saved through creative use of informal rescue schemes, cost-cutting measures and mergers. Many other firms have simply downsized rather than collapsed. It is also clear that secured creditors (particularly banks) have, on occasions, been reluctant to foreclose on struggling debtor clients because their assets were not worth realising during depressed economic times. The rise of the ‘zombie’ company, drip-fed with small amounts of funding but barely surviving as a viable business entity, has been noted. That dynamic might change if the economy picks up significantly. There are also hints that some small companies are being ‘abandoned’ by their owners without undertaking formal insolvency procedures – but there is no hard data on this phenomenon.

The overall number of corporate insolvencies may have declined steadily since 2008, but there have been significant variations in resort to different procedures. Thus, there were 4,822 administrations embarked upon in 2008, but this figure had fallen to 1,406 in 2015, which is a drop far more dramatic than that experienced with insolvencies. There were 587 Company Voluntary Arrangements (CVAs) in 2008, but this number also fell in 2015 (to 357). The decline has been most marked for receiverships, which reduced from 867 in 2008 to a position, at the time of writing, in which there are only single-figure incidences. That particular decline was predictable as the effect of the Enterprise Act 2002 reforms began to kick in.

The pari passu principle is often said to constitute a fundamental rule of corporate insolvency law. It holds that, in a winding up, unsecured creditors shall share rateably in those assets of the insolvent company that are available for residual distribution. In what might be called the ‘strong’ version of pari passu, ‘rateably’ means that unsecured creditors, as a whole, are paid pro rata to the extent of their pre-insolvency claims. This contrasts with the ‘weak’ version of pari passu in which such creditors share rateably within the particular ranking that they are given on insolvency by the law – a system of ranking that draws distinctions between different classes of unsecured creditors (for example, preferred employees and ordinary unsecured creditors).

This chapter and the one following consider whether the pari passu principle (hereafter discussed and referred to in its strong version unless otherwise stated) operates in an efficient and fair manner and whether there is a case for approaching post-insolvency distribution in a different way. Issues of accountability and expertise will not be addressed since pari passu is a substantive rule governing the distribution of goods and little is to be gained by asking whether a principle is, in itself, accountable or expert. Whether insolvency principles are administered accountably and expertly are matters dealt with in other chapters.

As noted in chapter 13, creditors are free, prior to winding up, to pursue whatever enforcement measures are open to them: for example, repossession of goods or judgment execution. Indeed, the race goes to the swiftest. Liquidation puts an end to the race as the liquidator is responsible for the orderly realisation of assets for the benefit of all unsecured creditors and for distributing the net proceeds pari passu. The pari passu principle, however, can only apply to unencumbered assets of the insolvent company that are available for distribution. If a company holds property as a bailee or trustee, that property is not part of the common pool for distribution. Similarly, goods possessed by the company under a contract of sale that reserves title to the seller until completion of payment do not form part of the pool.

In some ways, corporate insolvency law has come a long way since the Cork Report. Numerous statutes, court decisions, administrative reforms and changes in professional practice have sought to develop the regulatory landscape so as to remedy deficiencies and secure newly appreciated needs. In the new millennium, the UK Government has shown a renewed desire to attune insolvency laws to the requirements of enterprise while, at the same time, avoiding abuses and injustices. These changes have given the UK a high position in terms of world corporate insolvency law rankings. In other ways, however, corporate insolvency law can be seen, to date, as an area marked by missed opportunities and modest achievements. It has, first, failed to develop as an organised, consistent and purposeful body of rules and processes. This has been a legal sector in which Cork's prescriptions were cherry-picked and where, subsequently, particular issues have been dealt with piecemeal by both legislators and judges. Corporate insolvency law has, secondly, been developed without close coordination with relevant legal sectors and processes. It has not been linked sufficiently tightly with company law – in spite of its relevance to the ongoing needs of healthy companies – nor has it been tied in with an analysis of the arrangements for providing finances for companies that are found in the UK. As was made clear in chapter 3, corporate insolvency law is faced with a pattern of corporate funding that is dictated very largely by the legal frameworks that govern the provision of credit, notably those relating to security and quasi-security. To design insolvency law without looking at those arrangements is to cut the cloth without measuring the client.

A third deficiency is that this has been an area of law that has developed without a consistent guiding philosophy. As was stressed in chapter 12, different procedures have been developed on the basis of inconsistent assumptions not only about the values and objectives that are properly to be pursued, but also about the potential and roles of the different actors that are involved in insolvency processes. Directors and employees are central figures in corporate insolvency law and processes, but the law is based on notions of directorial roles and employee rights that are multiple, inconsistent and competing. This has led to a host of confusions, uncertainties, inefficiencies, unfairnesses and misplaced accountabilities.

The main potential bases for supporting pari passu as a principle of corporate insolvency law are that it provides an efficient and a fair ground rule for allocating the residual insolvency estate. As was seen in the last chapter, however, exceptions to pari passu produce a principle that is unduly complex and uncertain. This chapter considers the extent to which pari passu can be bypassed and a central issue will be whether bypassing is so easily and frequently practised that the value of pari passu is undermined. Here, therefore, we return to the second of the two key problems that corporate insolvency law faces in this area: how a company's insolvent estate is to be constructed.

As a preliminary point, it should be emphasised that the law does not readily countenance contracting out of collective arrangements for dealing with the insolvency estate. It was noted in chapter 14 that parties may be allowed by the courts to enter into contracts in a manner that worsens their status in the distribution of an insolvent company's estate. What the courts will not do is allow creditors to ‘contract with [their] debtor [to] enjoy some advantage in a bankruptcy or winding up which is denied to other creditors’. The House of Lords made it clear in the British Eagle case that this would be contrary to public policy whether or not the contractual provision was expressed to take effect only on insolvency. Effect would not be given to a contractual arrangement that attempted to avoid collectivity by purporting to allow certain creditors to opt out of pari passu distribution of the residual estate to their advantage. British Eagle was a member of an International Air Transport Association (IATA) clearing house scheme in which moneys due from airlines to each other would be netted out each month. When British Eagle went into liquidation it owed money to a number of airlines but it had a claim against Air France, which the liquidator sought to recover.