| An essential
quality of an effective commercial attorney is the gift
of clairvoyance.
Currently, this is not
a subject taught at law school.
By clairvoyance, I mean
that when a client asks the attorney for advice on a
business venture or asks the attorney to draft a business
contract, the attorney needs to tilt back the chair,
gaze at the ceiling and ask him or herself - what are
all the things that could go wrong with this in the
future? And if your prophetic gifts are deficient, your
client may pay a heavy price. Take this real-life example.
A few years ago, some
businessmen formed a joint venture to design and construct
what is now the Two Oceans Aquarium in Cape Town. They
had in mind that, once the aquarium had been built,
it would be operated by a trust - which at that stage
had not been formed.
So the joint venturers
brought in consulting engineers, builders and experts
of every description. And the aquarium was duly built
in accordance with their advice on design and materials.
When the aquarium was
completed, a trust was formed to operate it. At that
juncture, things turned sour.
The advice the professionals
had given turned out to be wrong - indeed negligent
- in one important respect. They had given wrong advice
on the way in which the aquarium display tanks should
be waterproofed. Consequently, there were leaks and
the steel reinforcements became corroded. |
It cost the trust
(which was now operating the aquarium) some R14 million
to remedy the defects. The trust then sued all the professionals
involved for damages for having given negligent advice
- the engineers, the builders, the consultants, the
sub-contractors.
And, at this point,
the lack of clairvoyance of the legal advisers was laid
bare. How could the trust sue for damages caused by
negligence when the negligent advice had been given
at a time that the trust had not yet been formed and
was not yet in existence?
In vain, the trust's
lawyers argued that the law allowed a person to sue
for negligence that had occurred before that person
came into existence. The Supreme Court of Appeal would
have none of it. To recognize a right to sue for damages
for negligence in such circumstances, said the court,
would stretch the law beyond its accepted boundaries.
The attorneys who had
advised the original joint venturers had neglected to
gaze at the ceiling after the first consultation and
ask themselves - who will sue for damages if the design
and construction of the aquarium goes wrong?
If they had applied
their minds to this fundamental question, the answer
would have been clear - a few lines should have been
added to the contract to say that any right to claim
damages arising out of the negligent design or construction
of the aquarium would vest in a trust still to be formed.
This would be what Roman law called a stipulatio alteri
or "a contract for the benefit of a third party". |
