The Role Of The Attorney-General
& Lessons For Kan Dapaah
The unfolding Alfred Agbesi Woyome judgment debt saga and the 2010 report of the Auditor General about judgment debts against the state have ignited public debate about the role of the Attorney-General in managing the state’s legal liabilities and claims against the state. Some former public appointees in response to public outcry about the quantum of judgment debts the state is saddled (estimated at about US I billion dollars) have contended that their actions in terminating procurement processes or settling apparent claims against the State served the national interest since through those action the State made saving or averted additional financial injury.
We cannot cursorily dismiss these submissions by the former public officials as lacking merit. We will need an elaborate legal, economic and financial analysis to ascertain whether indeed the actions taken by these public official caused losses, savings or gains for the State. We should also not forget the fact that sometimes powerful actors, including national governments, deliberately breach contracts usually on partisan political basis not taking into account the financial consequences of such a breach
However, when we limit our analysis exclusively to the quantum of judgment debts contained in the 2010 Auditors-General’s the inference we draw is as chilling as it is terrifying from the standpoint of jealously guarding state’s resources. We are compelled to draw the conclusion either that the legal apparatus of the state is so weak that the Attorney-General Department lacks the capacity to successfully defend claims against the state or that there is so much impunity in the public sector as regards the exercise of state power that the Attorney-General’s Department is often incapable of putting up reasonable good defenses for claims against the state. When the Attorney-General is faced with such hopeless cases, the result is what we are now faced with.
It must be emphasized that the sources of potential claims against the state are endless. Claims against the State may arise from the activities of public officials/politicians recklessly and maliciously terminating the state’s legitimate contractual obligations; or colluding with private persons and entities to make fraudulent claims against the state. Likewise, public servants acting in good faith may settle claims against the state or assume liabilities for and on behalf of the state based on incompetent, negligent or self-interested legal or other advice from other public servants. Further, employees, servants or agents of the state may decide to do as they please oblivious of or not caring about the legal consequences of their actions for the State. A mundane example is the police officer who deliberately detains a suspect in police ceils beyond the constitutional limit of 48 hours knowing very well his actions could give rise to a human rights claims for compensation against his employer, the State.
In light of possible claims against the State however, these claims have arisen, the question is that what is the role of the Attorney-General in managing liabilities or civil claims against the State? As the principal legal advisor to Government with further responsibility to defend all suits against the State, the Attorney-General like any other lawyer dutifully and honestly representing her client’s interest must exercise circumspection, prudence and good sense in the course of work. The Attorney-General, the Solicitor-General and other staff of the Attorney-General Department must decide which cases they would to the hilt, and which cases they should compromised and settle. Within the latter category fall cases with pecuniary claims arising from contract where the State is in clear breach. In such a situation, it disserves the national interest for the state through the Attorney-General’s office to waste state resources to defend suits through the court process only for substantial and needless awards plus pre-judgment and post-judgment interest to be awarded against the state.
Our recent history does not show that some of our public servant, particular at the Attorney-General’s Department led by the Attorney-General, has acted with good judgment as regards managing apparently legitimate claims against the state. A few examples of their apparent lack of good sense will suffice to illustrate the points being made.
Take the case of Calf Cocoa v Attorney-General, where in 2006 the Ghana Government refused to meet its obligations for the payment of the sum of $1,800,000.00 as working capital after the construction of the cocoa processing factory at Nsawan by a Chinese company. When the Government was sued and lost, the Ghana Government was ordered to pay an amount of US$1,750,000.00 towards the rehabilitation of the factory in addition to the US$1,800,000.00 originally claimed plus interest. This was needless financial loss to the state that outraged the learned High Court judge who sat on the matter that she had to say this: “it is sad to say the least that public officials who are entrusted with the public good and who are expected to act in utmost good faith create a situation which will result in creating financial loss situation in the country”
Similarly, in the case of Rockshell v Attorney-General, the plaintiff obtained a summary judgment in 2007 against the Government of Ghana in respect of breaches in the contract in building a sea defence wall. Successive government refused to pay allowing compounded interest to accumulate. By March 2009 the principal and accumulated interest amounted to US$ 87million. It was former Attorney-General, Mrs. Betty Mould-Iddrisu, who renegotiated with the plaintiffs to compromise and reduced the judgment debt to an amount of US$35,000.00 thereby making serving for the State.
Whatever reasons that accounted for the State’s refusal to settle these cases amicably with the parties, the fact of the matter is that when Attorney-General’s relentlessly pursue cases that have no legs to stand on or public officers refusal to pay legitimate claims against the State often lead to unnecessary and expensive litigations, escalations of arbitral awards, damages, compounded interest and loss of profit claims against the State.
Another example of such waste of State resources though defending such cases by the Attorney-General is the case of Country City Waste Ltd v Accra Metropolitan Assembly, which travelled all the way from High Court to the Supreme Court. The facts of this case were that in 1997 AMA signed a waste management agreement with CCWL. AMA also signed an agreement with Groupe Chagnon to supply waste management equipment to AMA, which equipment was assigned to CCWL. This agreement operated for two years until the Government abrogated it in July 2001, seized the trucks and other waste management equipment even though they had not been paid fully paid for, and sold them at reduced prices to third parties.
At the time the contract was cancelled, AMA owned the CCWL more than US$10,000,000.00. Although, CCWL made all efforts to have this matter amicably settled, when AMA and Ministry of Local Government refused to pay, CCWL sued in the High Court which awarded it over US$ 12,000,000.00 inclusive of cost and interest against AMA. While the High Court took the view that the award of the contract to CCWL breached the local Government Law, it nevertheless reasoned that AMA could not use for 2 years the services if CCWL without complaining and then refuse to pay for those services. Clearly to allow AMA to benefit from the contract without performing its part of the bargain would amount to a case of unjust enrichment.
When the case was appealed all the way to Supreme Court, the apex court of our land upheld the judgment of both the High Court and the Court of Appeal but further awarded CCWL interest from July 2001 to the date of the final payment of the judgment debt. By 2009 the unpaid judgment debt amounted to US $ 29,000.000.00 and the assets of AMA were being auctioned by the court order to pay the debt. This unnecessary escalation in the judgment debt could have been averted if the State through the Attorney-General Department had settled this matter long ago. It was highly inconceivable for any person acting in good faith and familiar with fundamental principles of contract law to ever expect that AMA would escape from all liability in a case with those facts. Therefore, it was least surprising when all the courts, from the High Court through the Court of Appeal to Supreme Court ruled against AMA. In the end, instead of the State/AMA paying an amount of US $10,000,000.00 as at 2004, the state in 2011 was confronted with a judgment debt of US $29,000,000.00. Here again, it took former Attorney-General, Mrs. Betty Mould-Iddrisu, to negotiate with the Plaintiff to compromise the judgment debt and reduce the judgment debt.
Other cases both within and outside of Ghana before national courts and international arbitral bodies such as Automobile Engineering Co Ltd v Attorney-General, where the State is now saddled with a debt of 6 million Ghana cedis as 2010 when the High Court in 2003 awarded the company a judgment debt of GHC 50,279.96 and unfortunately the State did not pay.
The case of Construction Pioneers v Government of Ghana where an international arbitral tribunal made an award against the Ghana Government for abrogating four contract CP was executing, show a similar pattern loss to the State arising from reckless disregard for the national interest by public officers. In 2007/8 the Government was forced to pay 4 million pounds when CP obtained an enforcement order for the arbitral award to enable it seize Government assets in UK in satisfaction of the award.
The stories and outcome of these cases suggest at least two useful lessons for the Attorney-General of the Republic of Ghana and other public officials. First, officers of the Attorney-General’s Department must exercise good judgment and must not take lightly the decision to contest in court claims against the state, especially where those claims are contractual in nature. Whether or not the proper constitutional or statutory procedures was followed or not the fact of the matter is that once the state or the state entity has obtained benefits under a contract which is later declared unlawful, some liability may lie against the state at depending on the circumstances for unjust enrichment or an equivalent doctrine in equity.
Therefore, if the state assumes a largely legalistic posture and pleads illegality as happened in CCWL, this may not be enough disclaim total liability. The better approach may be for the State to use illegality as a bargaining tool to settle such claims. If a decision is taken to contest such cases, there must be a cost-benefit analysis of decision to so contest the claims through the court system. Upon such analysis, lawyers for the State might discover that it makes better economic sense to settle through mediation or arbitration legitimate claims against the State in order to make savings for the State.
Indeed, there are different modes of dispute resolution practiced worldwide. These include the traditional litigation in court, arbitration, conciliation, mediation pre-trial court aided settlement and settlement between the parties themselves. Dispute settlement may be done by the parties themselves without going to court. What the parties agree binds them and it is enforceable by the court should one party renege on the agreement.
The practice of litigants and their lawyers attempting to settle cases is not new. It is part of the Code of Ethics of the Ghana Bar Association. It is provided in Section 43 (1) of the Code of Ethics of the Bar as follows:
43 (1) It is the duty of a lawyer to advise his client to avoid or to terminate litigation whenever the controversy will admit for fair settlement.
(2) a lawyer commits misconduct if-
a) he fails to communicate to his client the terms and effect of any settlement offered to his client;
b) he declines to take an available opportunity in the clients interest to reach a solution by a fair settlement out of court instead of engaging in legal proceedings.
A significant point to note from the Code of Ethics of the Ghana Bar Association (and which may not be known to the public) is the issue of professional misconduct for a lawyer to proceed to court to litigate when there is an opportunity to settle a claim out of court.
However, even in view of the above, it appears foolhardy and manifests an approach to law that places traditional adversarial, legal processes over non-adversarial methods of dispute resolution when lawyers for the state stubbornly defend legitimate claims to which the state has no reasonable defences giving rise to unnecessary costs, damages with compounded interest and loss of profit claims against the state.
It is within this context that I find the various overtures of the former Attorney-General to have claims against the state settled amicably through alternate dispute resolution a welcome development that should be pursued by her successors.
An ADR approach toward settling legitimate claims against the government should lead to substantial savings for the state.
Issues now being raised as to the transparent processes for the settlement of such claims, whether cabinet or executive approvals are necessary before the Attorney General binds the State to such settlements and the role of Parliament in such settlements may also be examined by the current Attorney General and Government.
Another point which seems to be eluding us in all the public disclosure is that we should hold public officers accountable for reckless actions that cause loss to the state.
Following the judgment of the late Justice Dixon Afreh in Republic v Ibrahim Adams and ors convicting some public servants for their reckless or neglect actions in not defending the interest of the state, we should expect public officers and politicians to act with diligence care when transacting matters for the state.
Unfortunately, there is a general misconception among many public officers that once they act under the color of their office, not matter how recklessly they has acted, they are immune from any liability arising from their actions. There can be nothing further from the truth.
Both at common law and under the provisions of article 293 of the Constitution, a public officer including the President of Ghana who recklessly, mindlessly and without legitimate excuse or justification abrogates contracts thereby resulting in huge financial loss to the state makes himself vulnerable to both criminal and civil proceedings to make amends for the loss caused to the state.
In conclusion, the adoption or continuation of a non-adversarial approach by the Attorney-General to resolving claims against the state has clear benefits over adversarial methods. It saves time, is less expensive, averts needless litigation, and above all makes room for compromise that could lead to financial savings for the state.
If there is one thing some of us will remember about the former Attorney-General and Minister of Justice, Mrs. Betty Mould-Iddrisu, it was about her passion and commitment to safeguard the public purse through non-adversarial methods of resolving claims against the state.
This approach has potential risks and recently her actions have been the subject of public discourse. As Attorney-General you will need experts to advise on specialized matters of law to enable you deal with claims against the Government through ADR. But relying on people with different motivations for advice has its own costs, and this may be a necessary cost the Attorney-Generals’ of Ghana pay as an occupation hazard of being the Attorney-General of Ghana.
Source: A Legal Luminary
