People I Met Practicing Law

People I Met Practicing Law Episode Four: The Jerks

Quite a few years ago, I really ticked off a lawyer at one of the major firms. 

It was the early 1990’s, someone had called a recession, and everyone had shown up.  This big firm lawyer was acting for a bank trying to put the squeeze on a delinquent debtor.  My client was the delinquent debtor.  The bank had screwed up.  They had given him 30 days notice to repay his operating line and bounced cheques that were within the credit limit the very same day that the notice was given.  That is a no-no.   

I had parlayed that screw-up into a really good settlement. As part of the settlement, the bank wrote off some of the debt and refinanced my client’s mortgage to secure the rest of it on an interest-free basis.  Since they did not like my client much at that point, they included a term in the mortgage to the effect that if my client did not pay the mortgage when due, a very high rate of interest would click in.  

My client then defaulted on the mortgage and did his best to delay paying the bank as long as possible.  You see, he was a cantankerous street fighter type, and did not like the bank much at that point either.  He was quite annoyed that they had tried to ruin him.  Some people are touchy that way.

The bank demanded payment including interest at the punitive rate and threatened to start mortgage proceedings.  I pointed out a section of the Interest Act which made the interest penalty unenforceable. We took the position that my client would tender payment of the mortgage principal without the interest and that if the bank refused to discharge the mortgage, we would sue them for damages.  The bank had to cave in. They discharged the mortgage on a without prejudice basis.

The bank’s lawyer must have looked really bad to the Bank.  He was a banking lawyer at a large firm acting for a major Canadian bank.   A loser borrower and a suburban lawyer had somehow out manouevered him and his God-like client.  He accused me of sharp practice (which it was not). How embarrassing it must have been for him.

This all happened in the summer.  The Bank’s lawyer took some time to get around to suing my client. In fact, and quite coincidentally I am sure, he did not get around to serving him with the statement of claim until Christmas Eve.   He was making some sort of a point, I guess. That he and the bank were sore losers.  And petty.  And vindictive. That the powerful use the law as a weapon.  Nothing that comes as a great surprise.

Years later I had another run-in with a big-firm lawyer who I thought was an asshole.  I lost that one.  I acted for the vendor of a business who was going to stay on as the CEO.  I had asked for a number of changes to the share purchase agreement, the employment contract, and a bunch of minor documents.  One of the changes was to decrease the notice period that my client had to give on resignation from 12 months to 6 months.

The other lawyer made some of the changes that I asked for and detailed those changes in a cover letter.  He also sent redlines of the changed pages from all of the various documents. There were many pages to sift through.

Since this lawyer was responding to changes which I had asked for to the documents, it did not dawn on me that on the eve of closing he would include another major change which I did not ask for and would never have expected, nor that he would do so without listing it with the other changes in the cover letter. Although, I do have to admit that he redlined it.  What this creep did was to decrease the notice period to be given to my client if his employment was terminated from 12 months to 6 months, something that had never been discussed.

As I pulled pages off of my home fax machine at 10 pm at night to check the changes, I saw the change from 12 months to 6 months that I had requested in the resignation provision but somehow missed the identical change from 12 months to 6 months in the termination provision. Shit like that will happen when you are overworked and overstressed on the night before closing.  I was negligent, but the other lawyer was a jerk.

It turned out that unbeknown to my client and myself, the purchaser was in the process of buying a competitor of my client at the same time and planned to merge the two companies and give my client’s job to the CEO of the other company.  Not only did they want to screw my client, but they wanted to do it at half the severance cost.

I reported the claim to my insurance company and I reported the other lawyer to the Law Society.  They slapped him on the wrist and told him not to do that again. 

In court, we refer to opposing counsel as “my friend.”  What bullshit!

The lesson for young lawyers:  Be careful out there.   

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