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CCCA_V4No1_Closing-FIN.qxd:CCCA_V1No2_BackPg-V1.qxd 2/3/10 2:11 PM Page 46 Closing The Deal Call it the way it is It may not make you popular, but your role as an in-house lawyer is to deliver the good news as well as the bad. art of being in business for companies Your role in this context is twofold: to a strong case, is avoiding the potential Plarge and small is handling commercial be candid in your assessment as to the damage litigation can have on your com- disputes with customers, suppliers or merits of the claim. Put bluntly, if the case pany’s competitiveness. other business relationships. is a “loser” you must apprise the company As you set about making your case, Most of the time, these disputes can be of the situation, find a way to repair the whether your company is the plaintiff or settled in the normal course of business. situation and move forward in the busi- the defendant, you will be filing docu- Drawing on mutual goodwill, both sides ness relationship. ments or be subject to discovery. This can sit down together, sort out what isn’t Second,your role is to favour,as much as could involve producing very sensitive working, and then move on. possible, an alternative resolution to the documents, including financial docu- This is especially true when the rela- dispute, as opposed to going to court or ments which could fall in the hands of tionship promises to be lasting and benefi- full arbitration. Over the years I’ve wit- a competitor. cial. In these situations, there is a real nessed the psychology of “gearing up for That is why it falls to the legal team to incentive to resolve any outstand- do a full analysis, to search for your ing issues to ensure that the rela- “BATNA” (best alternative to a tionship is not negatively affected. negotiated agreement). For exam- But if the relationship is a one- People in a business unit ple, it is wise to consult with upper off, with no long-term relation- “ management to discuss the best ship to safeguard, the objective would rather not hear that course of action; it might well take may be different.This is not to say they have a bad case, or that a different view than the troops that you should abandon looking down below. for ways to settle the dispute other the contract does not run than by long and costly means. in their favour. Serve our company Settlement is often ” The role of the law department in evaluating commercial disputes is the best course to call it the way it is, to clearly Unfortunately, sometimes two businesses battle” or “falling in love with one’s case” articulate reality. This is true even when cannot come to settlement terms. take over,especially when the business unit we must deliver unpleasant news to the Ultimately, they find themselves heading feels that it is “in the right” in the dispute. business unit, when our own company is for arbitration or all-out litigation, The problem is that, most of the time, partially at fault or when, for example, the depending on the provisions of their dis- business people dramatically underesti- execution of the contract or non-per- pute resolution clause. mate the difficulty, time, cost, energy and formance is at issue. At this juncture, two considerations disruption associated with full-blown It may not make you or your law should guide your legal department. arbitration or litigation. Not to mention department popular. But your role isn’t to First, your legal department must “call the uncertainty, the sheer unpredictability win a popularity contest; it’s to serve the it the way it is.” of the outcome, since, let’s face it, there best interests of your company by stand- This can be a challenge.People in a busi- are many ways to tell a story, with many ing your ground. ness unit would rather not hear that they shades of grey. have a bad case,or that the contract does not Daniel Desjardins is senior vice-president PIERRE CHARBONEAU run in their favour,or that perhaps,the fault Confidentiality issues and general counsel at Bombardier Inc. lies with non-performance on their part. Another reason to settle, even if you have (danield@bombardier.com) 46 CCCA Canadian Corporate Counsel Association SPRING 2010