How to Compensate for Mental Stress at Our Workplaces

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By Michael Dugeri

Work-related mental stress has been described as the adverse reaction experienced by workers when workplace demands and responsibilities are greater than the worker can reasonably manage or are beyond the workers’ capabilities. Therefore, it has been advocated that employers need to balance both demands and resources in the workplace in order to manage work-related mental stress.  This is because high levels of job demand and low levels of job resources could easily result in mental stress for the workers.

Mental health is an integral component of Occupational Safety and Health (OSH), which is a primary concern of labour and employment law. A safe workplace is not only about physical safety – it’s about the worker’s psychological safety too.  This means that employers have a duty of protecting the safety, health and welfare of their workers. The enjoyment of these standards at the highest levels is a basic human right that should be accessible by each and every worker. Regardless of the nature of their work, workers should be able to carry out their responsibilities in a safe and secure working environment, free from all forms of hazards.

The law provides for compensation to workers who have experienced mental stress in the course of their employment. The Employee’s Compensation Act, 2010 (“ECA”) provides that compensation is available to an employee who suffers mental stress, where the mental stress is an acute reaction to a sudden and unexpected traumatic event arising out of or in the course of the employee’s employment; or if the employee has been diagnosed by a medical practitioner as suffering from mental stress arising out of the nature of work or the occurrence of any event in the course of the employee’s employment. See section 8 ECA.

Section 8 (2) of the ECA provides that where the mental stress is caused by the decision of the employer to change the work or the working condition in such a way as to unfairly exceed the work ability and capacity of the worker (thereby leading to mental stress), such situation shall be liable to compensation to the degree as may be determined under any regulation made by the Nigeria Social Insurance Trust Fund (NSITF). The NSITF is the statutory body charged with the responsibility of administering the Employee’s Compensation Scheme (ECS) established under the ECA.

It is pertinent to note that the ECS is a social security/welfare scheme that provides comprehensive compensation to employees who suffer from occupational diseases or sustain injuries arising from accidents at the workplace or in the course of employment. The basis for ‘compensation’ is the employer’s duty of care. The idea of compensation suggests that someone has suffered a wrong for which he has to be compensated monetarily. This implies that another person has a duty to prevent the occurrence of the wrong suffered. Payment of compensation by the employer to the worker is rooted in the accepted common law principle that the employer has a duty of care, a duty to protect the health, welfare and safety of the workers. Where the worker sustains injuries, gets ill or dies under work-related circumstances, the employer is liable to pay compensation to the worker or to his dependents, in the event of death. The ECS is funded by monthly contributions from employers for the purpose of this compensation, as may be required from time to time by deserving workers.

The system of compensation for occupational mental stress established under the ECA is laudable, even though it also poses certain challenges for affected workers. First, having to prove that the worker’s mental stress actually relates to his/her work is tough, especially in an environment like Nigeria that is plagued with many other intervening factors. Second, it is doubtful if monetary compensation is adequate for victims of occupational mental stress or if full rehabilitation of the victim is possible in all cases. It is against the foregoing that it is argued that a better system of compensation is the type that mirrors contemporary frameworks for OSH, which are designed to be proactive rather than reactive to the physical, social and mental aspects of the workers’ health. Just like physical infirmities, mental health problems in the workplace are a global phenomenon. In Nigeria, the typical work environment is full of precipitating factors such as:

  1. High quantitative and qualitative workload,
  2. Inconsiderate work schedules,
  3. Poor remuneration, deficient welfare package, delayed/unpaid salaries.
  4. Neglect of safety measures, etc.

All these translate to an increase in the risk of mental health problems in the workplace. Unlike the ‘loud’ nature of physical health problems, mental health problems in employees is a ‘silent’ phenomenon, which goes unnoticed and may be confused with lack of commitment to the job. Unrecognized mental health problems in the workplace can affect performance and productivity, hence the need for organizations to be proactively pre-occupied with promoting and ensuring both the physical and mental health of its employees. Beyond the issue of high quantitative and qualitative workload, closer attention should also be paid to physical features of the workplace like lighting, ventilation, work space, sanitation and noise levels.

Organisations can manage and prevent stress by improving conditions at work. While the common treatment for mental health problems is prescriptive medication, employers have a role in making adjustments and helping the affected individual to manage the problem at work. Some of the suggestions that have been advanced by experts in the field of OSH include the following:

  1. Having senior management committed to  reduce  workplace stress;
  2. Consulting with workers to create and promote a mentally healthy workplace culture;
  3. Use validated risk assessment processes;
  4. Ensuring the organisation has appropriate policies and procedures in place and workers are aware of these;
  5. Managing workplace psychosocial risk factors and stressors;
  6. Providing regular and respectful performance feedback;
  7. Having a ‘Harassment Contact Officer’ in place for workers to speak to;
  8. Provide training around managing workplace and individual stress levels;

Mental health is an intricate but pressing workplace issue with multiple consequences. Occupational demands can be highly stressful and many jobs make severe demands in terms of responsibility, time, and performance. Rather than continuing with a culture of indifference, denial and evasion, there is need for Nigerian workplaces to recognize mental health as a realistic and legitimate concern, as well as display total commitment to the implementation of policies and practices that will ensure a supportive framework for workers.

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Safeguards against Breach of the Lawyer’s Duty of Confidentiality

By Michael Dugeri

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It is commonly understood by lawyers that they are under a duty to protect confidential information relating to their relationship with clients. The law imposes on lawyers a strict obligation to safeguard client’s confidential information.

Section 19 (1) of the Rules of Professional Conduct for Legal Practitioners 2007 (“the Rules”) is explicit that “all oral or written communications made by a client to his lawyer in the normal course of professional employment are privileged”. Sub-section (2) goes on to provide that a lawyer shall not knowingly:

  1. reveal a confidence or secret of his client;
  2. use a confidence or secret of his client to the disadvantage of the client; or
  3. Use a confidence or secret of his client for the advantage of himself or of a third person unless the client consents after full disclosure.

 It is to be noted that, like all rules of law, there are also exceptions to this rule. For instance, disclosure is permissible when required by law or a court order, or with the client’s consent. See section 19 (3) of the Rules.

The lawyer’s duty of confidentiality has broad application. It continues after the representation ends and applies to information received about prospective clients as well. The duty not only forbids revealing information, but also proscribes a lawyer’s use of confidential information about a client to the disadvantage of that client. With regard to former or prospective clients, a lawyer may not use confidential information to the disadvantage of a former or prospective client unless that information has become “generally known.”

Generally, both the duty of confidentiality and the lawyer-client privilege encourage clients to trust their lawyers. The lawyer-client privilege, especially, encourages clients to tell his or her lawyers everything, though the duty of confidentiality does this as well. With complete information, lawyers can provide the best and most appropriate advice.

Notwithstanding its importance, few lawyers and law firms have put in place safeguards against the breach of this fundamental duty. It is often taken for granted by most lawyers and law firms that this duty would enforce itself, which is hardly the case.

As a lawyer or law firm, it is necessary to do a self-appraisal of the systems you have in place for managing clients’ confidential information and consider how you might improve them to create greater confidence from your clients and insulate yourself against potential liability for breach of the duty of confidentiality.

The following are some pointers to remember about client confidentiality:

  1. Don’t discuss business outside the office.
  2. Never discuss one client’s business with another client.
  3. Beware of water cooler conversations. Can your chatter with the client at court premises be overheard by other clients or lawyers?
  4. Don’t talk to the press about your client’s business. Decline to answer if a reporter or blogger calls to ask if your firm is representing a particular person. Decisions about what to say to the press should be made by the client.
  5. Remember the law is a profession, not merely a business. Clients pay good money for help with their problems. They deserve respect for their privacy.
  6. Be especially cautious in office sharing arrangements. Beware “gossip” with employees of other firms. Keep case files segregated.
  7. Remember that your duty of confidentiality continues even after the case is closed. It also continues after you leave the law firm.
  8. Be wary when non-staff members want to use your office for ‘short meetings’ or ‘quick research’. Make sure no client files or documents are lying about carelessly or visible.
  9. Never release information to callers such as a client’s accountant or business associates or partners without authorization.
  10. Be careful when disposing of confidential papers, including rough drafts or duplicates. Use shredders or other secure disposal methods for sensitive materials.
  11. Never forget that the attorney-client relationship is built on mutual trust and confidence. Clients come to you expecting a form of sanctuary. You must honour that.
  12. Put in place secured means of storage of clients’ files and communication with clients.

The law office is an exciting place. The lawyers and support staff are privy to information others don’t have. You learn interesting things about prominent people. Resist the temptation to share this information with outsiders, including friends and family. The duties of client confidentiality are broad. It is not limited to merely what the clients tell you. It also precludes unauthorized discussions of case strategy or evidence.

Loose lips sink ships – and might well lead to ethical and malpractice problems. Every member of a law firm, from senior partner to the litigation clerk, is under a strict obligation to protect the privacy and secrets of clients. Rule 19 (4) provides that:

“A lawyer shall exercise reasonable care to prevent his employees, associates and others whose services are utilized by him from disclosing or using confidences or secrets of a client, but a lawyer may reveal the information allowed by sub-rule (3) through his employee.

A good idea is for firms to require all employees to sign confidentiality forms, which are placed in their personnel files. A blank copy of the form should be included in the office manual. It should be very clear to every member of staff that disclosure of a client confidence is a serious offence punishable with termination/dismissal. Breach of client’s confidentiality may prove very costly to the lawyer’s business and reputable, and leave him open to liability from the client and other third parties. It is better to be safe than sorry.

 

 

 

 

 

No-Work-No-Pay Policy V. Right Of Workers To Industrial Action

To begin with, is it reasonable to refuse a worker his pay simply because of the decision of a union of his class of employees, who never sought his individual opinion? But then, seeing that this said decision invariably affects the business of his employer, does it also make sense for an employer to pay his employee unearned wages for simply sitting at home? Admittedly, it is very tasking to strike a balance between these two conflicting rights.

The Federal Government of Nigeria on October 11, 2017 announced its resolution to enforce a “No Work No Pay Policy”. This resolution, though couched in the shape of a government policy, is in fact already contained in an existing law as encapsulated in Section 43 of the Trade Disputes Act, which empowers an employer to withhold the employee’s wages for the said duration.

Internationally, strikes are in fact recognised as almost sacred, inalienable rights of workers. Part 111, Paragraph 7 of the International Labour Organisation Convention (No 151) of 1957 provides that “No provision of this convention may be interpreted as limiting in any way whatsoever, the right to strike”. Article 3 and 10 of ILO Freedom of Association and Protection of Right to Organised Convention 1948 (No 87) recognise the rights of workers to organize activities for the furtherance and defence of the interests of the workers. Thankfully, Nigeria is a signatory to the ILO.

In Nigeria though, strike action is highly restricted. For instance, Section 30 of the TDA outlaws strike actions except as in the manner provided for under sub-section 6. Again, a union is required to first comply with the requirement of arbitration under the TDA before embarking on a strike. In what appears to be a stringent clog on the right to industrial action, Section 1 of Trade Disputes (Essential Services) Act Cap 433, LFN 1990 empowers the President to proscribe any Trade Union or Association that embarks on a strike action. Continuous disobedience to the said proscription is an offence punishable by a N10,000 fine or six years imprisonment.

What then is the fate of a Nigerian worker in the event that the Federal Government decides to implement section 43 of TDA? The judicial authorities at the disposal of the writer do not seem to be on the side of the workers. In Adams Oshiomhole and National Labour Congress v Federal Government of Nigeria and Attorney General of the Federation (2007) 8 NWLR (Pt. 1035) at page 58, the Court of Appeal held that the Labour Union as well as other civil society organisations had no right to call out strikes in response to general economic and political decisions of the Federal government as it had nothing to do with the individual contracts of employment these workers had with their various employers as envisaged in the TDA.

On the construction of section 43 of TDA, Justice B.B Kanyip while delivering his judgement in Oyo state Government v Alhaji Bashir Apapa (Chairman Nigeria Labour Congress Oyo state chapter) & Ors in Suit No: NIC/36/2007, held that “section 42(1)(a) of the TDA is self-executory. Its implementation, without more, does not depend on a further enquiry…. A strike, whether legal or not, falls squarely within the ambit of the said section and for which the strikers are disentitled from wages and other benefits envisaged by the section…..” 

From all indications, it appears that implementation of No Work No Pay Policy will be justified by law. Whether same is reasonably justifiable in a democratic state, will be a question for another day.

 

Source: Greymile

Occupational Injury: The NIC Awards N10.3m Against Employer

The National Industrial Court, Lagos Division has ordered Lagos Travel Inn to pay N10.3m to one Mr. Emmanuel Abah, who sustained an ankle injury after being trapped by the hotel’s elevator sometime in 2013.

The court, in a judgment by Justice J.D. Peters, said the order must be complied with within 30 days of the judgment.

Abah had, in the suit filed through his lawyer, Mr. Daniel Onwe, in 2014, explained that he was trapped by the hotel’s faulty elevator in the course of his duty as a cleaner in the employment of the hotel.

He claimed that the management of the hotel had been aware of the faulty state of the elevator, which was noisy and had on several occasions trapped people, but refused to fix it.

He claimed that rather than fix the elevator, the management urged the employees to continue to use it so as not to attract the attention of visitors to the hotel.

He claimed that on November 13, 2013, while trying to take the elevator from the ground floor to clean the rooms upstairs, one of his legs was caught in the doors.

He said that as he stepped his left foot onto the floor of the elevator while lifting his cleaning materials, the elevator swiftly took off in the upward direction with the doors trapping his left leg, pulling and dangling him headlong.

He said his ankle bone was crushed in the process, which eventually caused him a permanent injury.

He claimed that after receiving treatment in a hospital with no improvement, he was advised to seek the intervention of a trado-medical bone centre at Otukpa in Benue State, where he incurred extra expenses of N286,000, and a medical balance of N40,000.

He claimed that upon being discharged from the trado-medical centre, he resumed work on July 1, 2014, and was reluctantly admitted and redeployed to the laundry section.

Abah said he subsequently applied to the hotel for a loan of N40,000 to enable him to defray the outstanding medical bill, but his application was ignored.

He said two weeks after his resumption he was eventually served with a letter terminating his appointment without any reason.

He contended in his suit that his sacking was unjustifiable and urged the court to order the hotel to pay him N30m as compensation for the injury he sustained in the course of duty and another N10m for unfair dismissal.

In his judgment, Justice Peters held that with the permanent damage done to the leg of the claimant, there was no market where he could purchase a new leg.

The court accordingly, awarded the sum of N10.3m against Lagos Travel Inn, as damages for the permanent injury suffered by Abah.

Source: Jimi Disu Blog

Confirmation of employment after probation can be implied by the conduct of the employer.

tumblr_onkbqiRgvE1vdur62o1_1280The Court of Appeal in the recent case of Reliance Telecommunications Limited v. Mr. Olaore Olufemi Adegboyega (reported at (2017) 8 CLRN) held that the employer is deemed to have waived its rights in insisting on issuance of a formal letter of confirmation to its employee if the said employee is allowed to continue in his employment beyond the stipulated probationary period and he is regarded and treated as an ‘several months after the end of the probationary period’. The employment is deemed confirmed by conduct.

This decision is important to check the habit of some employers who, out of negligence or malice, fail or refuse to confirm some deserving employees, only to later turn around and rely on the employee’s probationary status in claiming certain obligations from the employee or denying him some benefits.

Facts of the Case 

In 2004, the respondent entered into a contract of employment with the appellant. The terms of contract indicated that the respondent would be on probation for a period of three months and either party could immediately terminate the employment during the period of probation. Furthermore, the contract of employment stipulated that after three months, the employment of the respondent would be confirmed and that three months’ notice will be required to be given by each party in case of termination of the employment. After the expiration of the three months probationary period, the appellant failed to confirm the employment of the respondent but continued to retain his services, paying him his entitlements and making representations to third parties suggesting that the respondent was in its employment. The relationship between the parties continued until sometime in 2005 when the appellant terminated the employment of the respondent without giving him any notice. The respondent was aggrieved and filed a suit against the appellant at the High Court of Lagos State alleging wrongful dismissal and claiming damages. After the conclusion of trial, the judge gave judgment in favour of the respondent and held that the appellant was liable in damages to the respondent. The trial court however, failed to consider and make pronouncement on the counter-claim incorporated into the statement of defence of the appellant.

The appellant was dissatisfied with the judgment of the trial court and filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to reverse the decision of the trial court. One of the issues formulated for determination was whether the trial court was right in holding that the respondent’s employment was deemed confirmed immediately after the probation period without meeting the other conditions precedent and in the absence of a formal confirmation letter.

Arguing the issue, learned counsel for the appellant submitted that it is trite that parties are bound by the terms of contract freely entered into. Reference was made to a term of the contract of employment stating that the offer of employment is subject to a satisfactory medical examination, satisfactory completion of a three months’ probation period to take effect from date of assumption of duty and that the offer is subject to other terms as set out in the letter of employment and conditions of service as may be determined by the board from time to time. Learned counsel posited that since the employment of the respondent was not confirmed by the appellant before the termination, a condition precedent was not fulfilled and as such the respondent was not entitled to the three months’ notice. Counsel urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant, learned counsel for the respondent relied on the decision in Kablemetal Nigeria Limited v. Gabriel Ativie to submit that in an action for wrongful termination of employment, the claimant is under obligation to plead and prove not only the appointment but also the terms and conditions for it to constitute the foundation of the action. Counsel submitted further that even though the contract of employment stipulated that the employment of the respondent must be confirmed after three months, the fact of non-confirmation was inconsequential and that the trial court was right in holding that the employment of the respondent was deemed confirmed since the appellant allowed the respondent to continue to work beyond the three months’ probationary period stipulated in the contract. Learned counsel relied on Obafemi Awolowo University v. Dr. A.K. Onabanjo and urged the court to discountenance the argument of the appellant and resolve the issue in favour of the respondent.

In resolving the issue, the court held thus:

The Appellant having allowed the Respondent to continue in his employment beyond the three months’ probationary period, paying him all his entitlements and further making representation via Exhibit C5 to third parties affirming that the Respondent is its employee several months after the end of the probationary period must be deemed to have waived its rights in insisting on issuance of a formal letter of confirmation to the Respondent. In such circumstances as obtained in the instant case Estoppel by conduct/representation can readily be invoked.

See: Military Government of Lagos State & Ors v. Adeyiga & Ors (2012) LEPLR 7836 (SC)

Issue is resolved in favour of the respondent.

M.T Odechima with V. I. Okafor for Appellant
TS. Adewuyi with T. O. Shittu Miss for Respondent

This summary is fully reported at (2017) 8 CLRN

Nigeria’s criminal justice system in need of overhaul, lawyers say

For an effective criminal justice system in the country, some eminent constitutional lawyers on Monday canvassed the revision and harmonisation of the various criminal laws.

The lawyers, who spoke with the News Agency of Nigeria (NAN) in Lagos, said a review of the criminal laws would give fillip to effective prosecution of cases and also add value to the nation’s administration of criminal justice system.

Mr Michael Dugeri, a human rights campaigner, urged that attention should be paid to issues bordering on speedy disposal of cases in a bid to decongest the nation’s prisons.

“There must be close attention to issues of decongesting the prisons which I think is fast becoming a national embarrassment.

“This should begin with a thorough reformation of the manner of administration of criminal justice in our courts.

“There are provisions under the Administration of Criminal Justice Act (ACJA) 2015 on speedy criminal trials; however, the impact of the provisions of that law is yet to be felt as our prisons are still overflowing with inmates.

“More work needs to be done in ensuring compliance with laws that encourage speedy trials; there should also be partnership with the various state governments on initiatives that are necessary to bring about these desired reforms,” he told NAN.

Also, a crusader for indigent prisoners, Mr Anthony Makolo, harped on an effective application of the Administration of Criminal Justice Act to promote speedy trials and rid the prisons of overcrowding filled with thousands of awaiting trials and underage.

He urged judicial officers to shun frivolous applications aimed at delaying trial of criminal cases and strictly comply with the provisions of the Act for speedy disposal of cases.

According to Makolo, judges must be inclined to giving meaning to criminal laws by granting favourable bail conditions to accused particularly where the law allows them to do so.

In the same vein, Mr Justine Eliagwu, called for a comprehensive review of the criminal laws.

According to him, the doctrine of plea bargain should be discarded from the criminal justice system to make accused persons to face trial.

“There is need to promote and enhance the laws as they relate to the criminal justice system in the country.

“For instance, the issue of plea bargain, in my view, should be discarded. From a lay man’s view point, it means to plead guilty to a lesser charge and one pertinent question here is why?

“This is simply because the sentence of a full trial is far more severe than the lesser one he opted for. This again, in my view, does not serve the purpose of justice.

“It is my submission that the doctrine be discarded as it encourages corruption; it is an escapist machinery to dodge the sledge hammer of the law put in place to punish such an offender.

“Hence, Section 179 of the Criminal Procedure Act lends its support,” he said.

On his part, another lawyer and social critic, Mr Aondonenge Akaa, also wants a total overhauling of the criminal justice system.

Akaa said: “A total overhaul of the criminal justice system is required for the anti-corruption drive of the present administration to succeed.“The doctrine of presumption of innocence should be made inapplicable in all corruption cases, especially high profile cases involving public funds.

“With the congestion of our regular courts and the strict constitutional rule of trial within a reasonable time coupled with the presumption of innocence principle, the ACJA is merely fanciful.’’

He said constitutional amendment would also ensure a more proactive legal framework in the country.

Source: The Guardian

Effective Contract Management

Contract management, sometimes referred to as contract administration, refers to the processes and procedures that companies may implement in order to manage the negotiation, execution, performance, modification and termination of contracts with various parties including customers, vendors, distributors, contractors and employees. While businesspeople often dismiss contract preparation as “lawyer’s work” that has little or nothing to do with the important aspects of the working relationship between the contractual parties, contracting is actually one of the crucial activities in determining the success of any business arrangement.

We assume that one of your roles as in-house counsel will be assisting your internal clients with contract preparations and it is absolutely essential that you work closely with your clients to establish well in advance your mutual expectations regarding the role that you will be expected to play in the negotiation, drafting, finalization and monitoring of a particular contract. In most cases, you should expect to be responsible for drafting the contract and all related documents as well as spotting and resolving specific legal issues. Managers inside your company will typically be responsible for identifying and resolving all of the business and risk management issues associated with the contract and the underlying relationship between the parties. However, in-house counsel do sometimes become heavily involved in negotiation of business issues and to have a great deal of input into the strategy goals and objectives of a particular contractual arrangement.

For each proposed contractual arrangement you should get in the habit of going through a checklist of the actions that you might be expect to take in order to assist the company. You’ll eventually develop your own checklist that you can refer to as time goes by; however, when you are first starting out we recommend that you consider each of the following “Top 10 Steps for Effective Contract Management”:

  1. Make sure that you begin with a thorough investigation of both the business and legal background for the contract and the proposed transaction and business relationship in which the contract is to be used. Appropriate representatives of the company should be interviewed to determine how the relationship has evolved and what, if any, commitments may have already been made by the parties. This is also the time to give special consideration to the actual and potential impact on the company’s existing obligations and business relationships.
  2. Working with the appropriate representatives of the company, you should identify the steps that need to be taken in order to comply with the requirements of any contract review and signature authority policies and procedures that have been established by the company. For example, does the contract need to be reviewed and approved by senior management and/or the board of directors and, if so, what needs to be done in order to expedite review and consideration.
  3. Once you have a good understanding the scope of the proposed business relationship you should identify the contracts and related documents required to document the relationship and complete any immediate transaction and then proceed with collecting and reviewing examples of the necessary contracts to expedite the drafting process and isolate specific questions that the company will need to answer in order for the contract to be complete and accurate.
  4. If warranted by the complexity of the proposed transaction, you should prepare a time and responsibility schedule for drafting, review, discussion, revision and completion of all required items and activities. For example, a time and responsibility schedule is often useful for a financing transaction that must pass through several stages over an extended period of time including preparation of a business plan, presentations to potential capital providers, preparation of financing documents and satisfaction of closing conditions.
  5. Taking into account discussions with company representatives regarding your role, you should participate in the negotiation of the essential terms of each contract and, if appropriate and useful, prepare a term sheet or letter of understanding to be sure that the parties are in agreement regarding the essential terms before time and effort is spent on contract preparation. If you are not to be directly involved in negotiations you should, at a minimum, provide company representatives with a list of questions that will need to be answered in order for the contracts to be completed so that the representatives can discuss them with their counterparts from the opposite party.
  6. Once background information has been collected and preliminary agreement has been reached on the essential terms, you should prepare the initial draft of each of the required contracts and related documents or, in cases where the opposite party is responsible for drafting, review the initial draft of such items prepared by the opposite party; discuss and negotiate necessary changes in the initial drafts and make sure that revised drafts are circulated for review and finalization. The timing of the drafting and revision process is crucial since delays can push the relationship off track and jeopardize realization of the business opportunities anticipated by both parties.
  7. Once the documentation is finalized you should prepare for the closing of the transaction, including pre-closing meetings and preparation of closing checklists and memoranda. If certificates and/or consents from outside parties are required in order for the contracts to be finalized and become effective they must be planned for well in advance and may themselves require time-consuming negotiations.
  8. Once all conditions to consummation of the proposed business relationship have been satisfied or waived, you should oversee completion of the closing of the transaction at which time all contracts and related documents are executed and exchanged and any required performance at the closing (e.g., cash payments) is completed.
  9. Once the closing is completed you should make sure that all of the closing documents are organized and that copies are delivered to all interested parties. This is also the time for you to make sure that the files relating to the transaction that have been opened during the process described above are organized so that they can be easily accessed in the future should questions arise.
  10. Working with company representatives, you should establish a plan for ongoing review of the performance of each of the parties under the terms of the contract, at least in those cases where the contract is long-term and calls for continuous performance over an extended period of time. As part of the plan you should calendar any dates identified in the contracts that may require follow up action, such as performance milestones and option elections.

We cannot overemphasize the importance of determining your role in the contracting process and the level of active involvement that you may have in negotiations relating to the contract. In-house counsel’s role can vary from active negotiator to behind-the-scenes scrivener. In all situations where you are empowered to take some actions without managers being present, you should make sure that procedures are in place to promptly communicate any new development to the appropriate businesspersons within the company. Absent this type of communication, and a clear delineation of responsibility between you and other company participants, you may find that responsible managers within the company are unhappy with the way the company is being represented. Moreover, lack of coordination increases the risk of embarrassing conflicts and misunderstanding that send the wrong message to the parties on the other side of the transaction.

Even if you are not expected to play a primary role in negotiating the terms of the contract, you should make every effort to encourage managers to notify you as soon as possible that the transaction is contemplated. While businesspersons do not always do the best job of informing their lawyers in advance, even in the best of circumstances, you should always attempt to sensitize managers and other involved parties within the company to the possibility that unforeseen legal issues may emerge from a particular business decision. With that knowledge and understanding, businesspersons can be trained to always discuss business points with the caveat that a final decision will ultimately depend on review by “legal”. This Top Ten helps in-house counsel define the important considerations in the contract management process, regardless of their role.

Culled from Association of Corporate Counsel