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The Practice of Law

The Rule of Law – It Even Matters in Business Law

by Maureen T. McKay and Murray Gottheil

Our background is in business law. Imagine our surprise when our editor suggested we write about the rule of law, which you might have heard is currently on life support. This foundational principle of democracy is the stuff of inspirational speeches by lawyers of the constitutional, criminal and administrative persuasion. Lawyers like us are more concerned with the trivial things that businesspeople care about, such as maximizing profits while minimizing liability. We are experts in drafting representations and warranties, incorporating companies and doing lunch.

However, our editor’s suggestion got us thinking. If the rule of law is not the domain of business lawyers, how is it that it is under threat from someone whose background is that of a businessperson?

We learned long ago that we have a legal system, not a justice system. Having extensive financial resources is often a better indicator of success than having the law on your side.

We may claim that the rule of law applies in our courts to ensure that everyone is treated equally, but any business lawyer can tell you that those with deep pockets can afford the best lawyers, and frequently use tactics designed to exhaust the financial ammunition of those with more limited resources to fund a legal battle. Nor is it uncommon for large corporations or wealthy individuals to allocate a huge budget to enforce questionable legal “rights” to steal from those who cannot afford the fight.

It seems to us that once we allowed the “financial might means legal right” philosophy to permeate our legal system at the street level, which is the business world, it was only a matter of time before it would seep into our political system.

It is hardly surprising that in the United States, the face of the idea that financial and military might should be used to suppress those with fewer resources is that of a businessperson with a reputation for bilking others in business and using his financial resources to abuse the legal system to deny compensation to his victims. We have observed over the years the tendency of bad ideas to migrate from the United States to Canada. We are kidding ourselves if we think we do not have to fight to prevent it from happening here as well.

When we leave ethics behind at our law school graduation ceremony in favour of being sharp, tactical, strategic and “smart,” we risk descending into thuggery masquerading as business savvy. It may be that sending a scary cease and desist letter on behalf of a multinational corporation to a small entrepreneur, knowing that your legal case is weak but that the recipient will have to comply because they cannot afford the fight, will just cause a tiny ripple in the water that is our legal system, but the accumulation of all of those ripples has brought us to this tsunami moment.

Perhaps being thugs in business suits is not really brilliant, and we should think about our tactics, and ethics, just a teeny bit more.

A version of this article was originally published by Law360 Canada, part of LexisNexis Canada Inc.


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