There are, however, many legal practitioners who have no wish to practice before the courts. As surprising as it may be to the public, many lawyers make it one of their principal objectives to keep their clients well away from the courthouse steps. These commercial or corporate lawyers are implementers to the extent that they put a negotiated deal into the form of an agreement and they are advisers to their clients. These are the lawyers with whom businessmen have most of their contact and, primarily, they are advisers. However, for advisers to be of use they must in fact be used and then used properly. How then may these advisers be of use to the mining industry?
There are several basic matters that the client must realize before he even contacts a lawyer:
A lawyer is a human being (notwithstanding popular belief) and, as such, has a personality with natural tendencies and characteristics. He may be conservative or reckless, patient or impatient, methodical or a shoot-from-the-hip type. The client should appreciate the nature of his legal adviser and consider from whom advice is coming.
The law is exceptionally complex and expansive, and becoming ever more so. No single person, no matter how brilliant, can be an expert in all fields of the law. Lawyers themselves acknowledge this, and many limit their practices to a defined area of the law. A client should keep this in mind — it can be both good and bad. For example, excellent advice can be received in the area of the lawyer’s expertise, but the same expert may miss something that is not within his expertise. It is for this reason that, at least in larger law firms, a client will have a general commercial lawyer responsible for his matters. This contact lawyer is expected to recognize a potential problem and is expected, with the consent of the client, to bring in the expert. In short, a lawyer should not, and cannot, be expected to know everything. Accordingly, one should know the areas of the law in which your adviser professes expertise.
A lawyer has only time and knowledge to offer. If you waste that time, you will be wasting your money. So it helps if the client thinks before visiting the lawyer.
Do not be concerned about discussing fees with your lawyer or asking for regular and detailed accounts, but do it before work begins on the matter.
A lawyer offers advice and cannot be expected to solve problems without the participation and co-operation of the client and the other parties.
With these preliminary comments in mind, it might be worthwhile to look at a few considerations that might be kept in mind when consulting a lawyer with respect to a potential deal:
Sometimes it is advantageous to involve your lawyer in the actual negotiations. The chances are that, because he represents a number of clients (each with its own style of deals), he can be of assistance, especially when there is a sticking point — sometimes all that is needed is a different route to the same endpoint. It is also sometimes helpful to use the lawyer as a sounding board for proposed arrangements. A lawyer will usually look at the deal from a different perspective than will operating people and may offer some constructive ideas. In addition, if the lawyer who is going to draft the agreement is involved at a relatively early stage, he may be able to suggest topics of discussion that will assist in putting the arrangements into an agreement in a straightforward and understandable way. (It is amazing how what often appears in concept to be a straightforward deal is a nightmare to reduce to writing and, all too frequently, the concepts which individually are workable are collectively unworkable. It is also invaluable to the draftsman of an agreement to know the “feelings” of the principals.)
Do not let your lawyer renegotiate the deal (unless that is what you want). Too often, an ambitious lawyer, thinking that he can get a better deal for his client, proceeds to draft an agreement (or insists upon amendments to a draft) that, although perhaps more advantageous to his client, are not in keeping with the negotiations. In setting forth the results of negotiations in a draft agreement, it is essential that the lawyer adhere strictly to the substance and spirit of the negotiations. To do otherwise can result (and has resulted) in the loss of a deal. After all, if the draft agreement is substantially different from the negotiations, what is the other side to think but that someone is playing games] Remember that the deal is your deal and the function of the lawyer (unless instructed to the contrary) is to discuss the arrangements and, if requested, to suggest possible improvements and transcribe the result of the negotiations in a clear and understandable fashion. If some of the suggestions are thought to have merit, they are often best pursued between principals rather than lawyers.
There is no such thing as legalese. An agreement is, or should be, written in the English (or other agreed upon) language and, if the person who is going to be governed by it does not understand any portion, then that portion must be clarified. If you have to visit a lawyer every time a question arises, despite obvious benefits for the lawyer, it is impractical, expensive, frustrating and unacceptable to you, the client. There is no question that some lawyers sometimes draft in a convoluted and verbose manner. The convolution can usually be corrected, unless it is dictated by other circumstances, such as tax matters, but not necessarily the wordiness. The lawyer’s principal concern should be for accuracy; unfortunately, this sometimes (too often?) leads to verbosity. However, be patient, sit back, and quietly and without predetermined bias slowly read an “offensive” section of an agreement. Does it make sense? Does it really say what you think the deal is? If the answer is yes, move on to the next problem; if the answer is no, take it up with your lawyer. Do not hesitate to ask your lawyer what a provision means. For practical purposes an agreement should be looked upon as a working document that the people who will be administering it must be able to understand. In the mining industry, the responsible person is often a project geologist, who is hardly in a position to trot off and see a lawyer every time a question comes up.
Remember that the thickness of an agreement is not a gauge of its complexity.
There is no such thing as a perfect, or airtight, agreement. It is neither possible nor practical to try to anticipate everything that might affect the arrangements contemplated in an agreement. For example, when a joint- venture agreement is executed, in all likelihood, it will not be known if the property contains a mineral occurrence, let alone whether the provisions of the agreement will have to extend to a mining operation. What the draftsman can do, however, is supply a procedure that will, we hope, permit the parties to deal with and resolve problems that may arise in order to permit the project to proceed.
In any arrangement, it is the relationship between, and the good faith of, the parties that makes it work or not. If it works, the agreement will probably be put into a drawer to gather dust while the part
ies get on with it. If there is a problem, it is handy to have a comprehensive agreement to remove from the drawer and use its provisions to solve, or offer a procedure to help solve, the problem and avoid a trip to the courthouse.
To a large extent, Canadian law is based upon the common law or, in other words, it is the law as interpreted and formulated by the courts. Like it or not, a legal judgment requires a lawyer to interpret its possible effects and applications to different circumstances. A good example is the lac/ Corona case, which has caused so much concern over the past while. Many people within the industry have difficulty understanding or accepting the results of that case — a mine changed hands (subject, of course, to what the Supreme Court of Canada decides). To a lawyer, the decision is not tremendously shocking as a matter of law (ignoring the enormous economic impact), because a lawyer reads the result in the context of the facts as found by the court. He does not consider what the industry “knows for sure happened.” In any lawsuit, it is the responsibility of litigation counsel to make certain that the facts are properly and clearly presented to the court but, in the end result, the court decides what the facts are (by deciding in favor of one witness, where there is a conflict, or putting less emphasis on some circumstances or facts, and so on) and bases its decision on these facts. If your particular fact situation does not fall within the facts of a given case, it may be possible to “distinguish” that case, with the result that it may not apply. Therefore, before visiting your lawyer have your facts well thought out.
So, it is fair to say that lawyers do have a constructive role to play as advisers to business even if the client is not in trouble. But, like any business tool, lawyers must be used properly and prudently by clients. The free thinker may even view lawyers as a necessary evil. Besides, with the way Parliament and the legislatures enjoy passing new laws, it appears that lawyers may be around for a while, so, the devil you know * * * Karl J. C. Harries is a graduate mining engineer and partner with the Toronto law firm of Fasken & Calvin. The information in this article is summary and general in nature and is not intended to be taken or acted upon as legal advice.
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