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Reliance on legal advice: Difference between revisions
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{{quote| | {{quote| | ||
'''Agent may seek legal advice'''<br> | '''Agent may seek legal advice'''<br> | ||
The Agent may from time to time seek and rely upon advice from professional advisers ''and will not be liable for any action taken or [[Act or omission|not taken]] in reliance upon that advice''.}} | The Agent may from time to time seek and rely upon advice from professional advisers ''and will not be liable for any action taken or [[Act or omission|not taken]] in reliance upon that advice''.<ref>The SPIRE version, for completists, is as follows: | ||
{{quote| | |||
The Trustee may act and rely on the opinion, advice of, report, confirmation, certificate or information (collectively, “'''Advice'''”) obtained from, any lawyer, valuer, accountant (including auditors), surveyor, banker, broker, auctioneer or other expert (each an “'''Expert'''”) (provided that, if the Trustee appointed such Expert, the Trustee has exercised [[reasonable]] care in the selection, retention and use of such Expert), irrespective of whether such Advice or (in the case of limb (ii)) any engagement letter (i) is obtained by or addressed to the Issuer, the Trustee or any other person or (ii) contains a monetary limit on liability or limits the scope and/or basis of such Advice. Any such Advice may be sent or obtained by letter, fax or electronic communication ''and the Trustee shall not be liable to anyone for acting in good faith on any Advice purporting to be conveyed by such means even if it contains some error or is not authentic''.}} | |||
“Purporting to be conveyed ...” is a sublime piece of ''[[wieselspielerei]]''. | |||
</ref>}} | |||
This may strike you as cavalier. But should you protest, expect to hear the agent’s legal advisers sagely intoning that, yes, this is absolutely standard in the market and non-negotiable, being a simple and effective allocation of risk by a service provider who gets paid a pittance and otherwise does not share in the fruits of the transaction. | This may strike you as cavalier. But, should you protest, expect to hear the agent’s legal advisers sagely intoning that, yes, this is absolutely standard in the market and non-negotiable, being a simple and effective allocation of risk by a service provider who gets paid a pittance and otherwise does not share in the fruits of the transaction. | ||
Have no truck with this nonsense. ''Especially'' not from [[External counsel|external legal advisors]], who have a raging [[Conflicts of interest|conflict of interest]] in dispensing this sort of “market colour”. | Have no truck with this nonsense. ''Especially'' not from [[External counsel|external legal advisors]], who have a raging [[Conflicts of interest|conflict of interest]] in dispensing this sort of “market colour”. | ||
=== Bad advice is not the client’s problem=== | === Bad advice is not the client’s problem=== | ||
No one is stopping an agent getting whatever [[Legal advice|advice]] it wants, ''on its own dime and at its own risk''. It’s a free country. (Now, we say, “its own dime”: note, though, how common it is for an agent to ask | No-one is stopping an agent getting whatever [[Legal advice|advice]] it wants, ''on its own dime and at its own risk''. It’s a free country. (Now, we say, “its own dime”: note, though, how common it is for an agent to ask its customer to foot the bill: it gets paid a pittance, does not share in the fruits of the transaction, etc. etc.) | ||
And | And nor is anyone stopping the agent ''relying'' on the advice it gets. Again, free country: that’s an [[agent]]’s prerogative. That it ''did'' get advice may even be (weak) evidence that it diligently discharged its contractual duty and wasn’t, factually, at fault. ''Weak'' evidence. | ||
But, still, if the advice turns out to be ''wrong'', that should be the agent’s problem, not | But, still, if the advice turns out to be ''wrong'', that should be the agent’s problem, not the customer’s. | ||
The answer is ''not'' for the agent [[Disclaimer|disclaim]] its liability to | The answer is ''not'' for the agent [[Disclaimer|disclaim]] its liability to the customer: ''it is for the agent to sue its lawyers''. That’s what it paid the blighters for: so they, and that juicy [[professional indemnity insurance]] policy they never seem to claim on, can cover the agent’s blushes if their advice turns out to be wrong and their client’s customer goes on the warpath. | ||
===If fails the commercial imperative=== | ===If fails the commercial imperative=== | ||
In any case, agents: think about it from your customer’s point of view. | In any case, agents: think about it from your customer’s point of view. | ||
You buggered up and lost your customer money: if you now let your own ([[Q.E.D.]] [[negligent]]) [[Law firm|lawyer]]s off the hook, you throw your customer under a bus. | |||
Your customer will not see the funny side of this. It will not matter that the contract is clear: your customer will rightly say it had little choice: your lawyers — yes, they who shall not be sued —hotly insisted it was a market standard. It may withdraw its business. It may well grumble about you to other customers in the watering holes across the square mile. | Your customer will not see the funny side of this. It will not matter that the contract is clear: your customer will rightly say it had little choice: your lawyers — yes, they who shall not be sued —hotly insisted it was a market standard. It may withdraw its business. It may well grumble about you to other customers in the watering holes across the square mile. | ||
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*[[All our other counterparties have agreed this]] | *[[All our other counterparties have agreed this]] | ||
*[[Legal eagle]] | *[[Legal eagle]] | ||
{{ref}} | |||