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{{quote| | {{quote| | ||
'''Agent | '''Agent may seek legal advice'''<br> | ||
The Agent may from time to time | 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''.}} | ||
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 the customer to foot the bill for its own legal advice. | 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 the customer to foot the bill for its own legal advice: it gets paid a pittance, does not share in the fruits of the transaction etc). | ||
And no one is 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. | And no one is 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 if the advice | But, still, if the advice turns out to be ''wrong'', that should be the agent’s problem, not ''yours''. | ||
The answer is ''not'' for the agent [[Disclaimer|disclaim]] its liability to you: ''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 client | The answer is ''not'' for the agent [[Disclaimer|disclaim]] its liability to you: ''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 client 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. | ||
If you buggered up | If 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 | 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. | ||
None of this will be good for your business. It undermines the [[commercial imperative]]: the main thing keeping you ''in'' business. Over the long run — unless your customer happens to be [[Archegos]] — the very worst thing a customer can do to you is withdraw its business. | None of this will be good for your business. It undermines the [[commercial imperative]]: the main thing keeping you ''in'' business. Over the long run — unless your customer happens to be [[Archegos]] — the very worst thing a customer can do to you is ''withdraw its business''.<ref>The exception proves the rule. ''Everyone'' now regrets that [[Archegos]] did not withdraw its business.</ref> | ||
=== It defeats the purpose of engaging lawyers === | === It defeats the purpose of engaging lawyers === | ||
Nor, this way, are you getting value for your legal fees. Your customer, who is likely to be paying them, certainly isn’t. There is a view that legal advice is really just legal compliance insurance: to engage lawyers is to buy access to their[[professional indemnity insurance]]. | Nor, this way, are you getting value for your legal fees. Your customer, who is likely to be paying them, certainly isn’t. There is a view that legal advice is really just legal compliance insurance: to engage lawyers is to buy access to their [[professional indemnity insurance]]. | ||
But here you would let off the ''actually delinquent party'' — your lawyers; your ''servants'', who would have no complaint if you threw the book at them; who said they were the grand-an-hour experts on this stuff, but turned out not to be — [[scot-free]]. They get their premium, ''but you don’t make them write the insurance''. Why on earth would you do that? | But here you would let off the ''actually delinquent party'' — your lawyers; your ''servants'', who would have no complaint if you threw the book at them; who said they were the grand-an-hour experts on this stuff, but turned out not to be — [[scot-free]]. They get their premium, ''but you don’t make them write the insurance''. Why on earth would you do that? | ||
And if ''you'' won’t sue your lawyer, bear in mind your customer ''can’t'': it has no privity. So the poor customer — who, don’t forget, is the only ''innocent'' party here — winds up paying for advice that gets you off the hook while being left high and dry and without any legal recourse against ''anyone''. | |||
Is this prudent business? Is this commercially reasonable behaviour? | Is this prudent business? Is this commercially reasonable behaviour? | ||
=== Incentives === | === Incentives === | ||
This is to say nothing of the perverse incentives it creates. If an agent can dissolve all liability, for free, by simply running to matron every time a cloud appears on the horizon then what should we expect its staff to do? Since every legally-penned [[email]], file note or memo functions like a cloak of [[mithril]] | This is to say nothing of the perverse incentives it creates. If an agent can dissolve all liability, for free, by simply running to matron every time a cloud appears on the horizon then what should we expect its staff to do? Since every legally-penned [[email]], file note or memo functions like a cloak of [[mithril]] however misconceived or dunderheaded it may be, wouldn’t ''you'' do that? Wouldn’t anyone? We should therefore expect an agent’s staff, on these terms, to decline to take a view on ''anything''. | ||
But the agent holds itself out as the purveyor of excellence in its chosen field of expertise. Experts are confident enough to take a view: that is what being an expert means. Shouldn’t it be prepared to exercise that skill? | |||
===Cui bono?=== | ===Cui bono?=== | ||
Lastly, ask this: who, principally ''benefits'' from such a clause? | Lastly, ask this: who, principally ''benefits'' from such a liability dissolution clause? | ||
Certainly not the customer: it winds up with an ostensibly actionable loss for which it has no recourse. | |||
Nor really the agent, since holding the putative free option incentivises poor behaviour from its staff, while exercising it will damage its client relationships. | |||
''And whose idea was this nutty clause, in the first place?'' | But the lawy — ahhhh, ''that’s'' it! ''That’s'' who benefits from this nutty clause. The ''lawyers''! ''And whose idea was this nutty clause, in the first place?'' | ||
Let the record reflect a certain [[Legal eagle|Mr L. Eagle, Esq]]. stepped forward at this point. | Let the record reflect a certain [[Legal eagle|Mr L. Eagle, Esq]]. stepped forward at this point. |