The Letter and the Spirit

 The young man whom we took on about a month back got himself taken to a meeting where the topic of discussion was over an investigation into what was a scam. When I asked him how he felt about attending a “serious” meeting, he remarked that he was finally learning how the world really worked. He said “I now get what you mean when you say that what looks nice on the outside actually isn’t.”

I’m glad he picked that up. I guess I am used to it or perhaps I just grew up cynical but too many of us in modern societies get a little a bit too obsessed with things that look good on the outside but aren’t really. Doing litigation PR was a good eye opener into how respectable wasn’t actually that. Being in corporate insolvency confirmed things. It gets even more so when you live in “status” obsessed Asia, where grandparents fight over who has to be most “respectable” grand kid, which often means which kid works in the most “prestigious job.”

We get so carried away by the veneer of respectability that we forget what it actually looks like. Singapore is especially prone to this disease. We’ve been trained to look upon to anyone in a profession and make the assumption that anyone who qualifies for the professional license has a certain level of moral integrity that mere mortals are not capable of.

However, as Don Corleone in the Godfather series states “A lawyer with a brief case steal’s more than a gangster with a gun.” A gangster with a gun can only grab so much cash when he (usually are) is robbing a bank. In the process of committing a robbery, the gangster faces risks of having the full wrath of the law coming down upon him.

The lawyer by contrast can steal with no risk. Take the basic way in which lawyers make money – time costs. In Singapore, the cheap lawyers start around S$500 an hour. It doesn’t take a genius to figure that anyone who is paid like this, has no incentive to actually solve problems in an efficient way. If anything, the lawyer is incentivized to, well, ensure that the molehill you had is bigger than Everest.

Yet, this method of payment is called “professional” and “respectable.” The time that lawyers and other professionals “sell” is supposed to be valuable, though how exactly it solves the original problem in the first place is questionable. Making professionals accountable by allowing for and encouraging “results” payments get frowned upon and as around 2021, charging on a results basis or contingency fees is generally not allowed in Singapore’s professional service industry.

One of the most ridiculous examples of “respectable” thievery came in a judicial management situation where the judge had no issue with the lawyer and liquidator charging on a “time-cost” basis but found the auctioneer’s costs prohibitively expensive because the auctioneer had the audacity to charge for results (a percentage of what he sold). Of the three, the auctioneer was the only one who could actually demonstrate the value of his services in actual dollars and cents but apparently that was not considered “professional” or respectable.”

Then, there is the example of “Shell Companies,” which are set up for various purposes. In many cases, such companies are set up with the purpose of minimizing taxes, which is not moral and or even illegal in itself.

However, Shell Companies have become what you could call the difference between what is legal (the letter of the book) and justice (the spirit of the book). There is nothing intrinsically wrong with setting up a shell company. In fact, it is perfectly legal to do so.

However, the question then becomes, the purpose of the said company. I remember being hired to handle the potential media fall out of the Zim Integrated Shipping trial in 2010. This was a case of following the money – except the money was flowing through one end and coming out at another through a web of shell companies. My client, who was the lawyer representing Zim had to concede that he lost to a “master swordsman.” Yes, things looked dodgy but they weren’t illegal.

 

 Years later, I would find myself on the side of someone who enjoyed setting up companies across the Caribbean. He wouldn’t own his own life insurance policy under his own name. Had to be done under a shell company. Again, there was nothing illegal about what the guy was going. There was a paper trail to account for things.

When people talk about being “by the book,” they’re talking about adherence to the letter of the laws. The argument is about being “prim and proper.” However, after nearly a decade of being in corporate insolvency, one gets to see how the letters of the law get abused. As such, we need to look at the “spirit” of the law and whether a person adheres to the spirit. What is legal may not necessarily be just and we need to understand that bad people get off because they haven’t broken the letters. What we need to ask is if these people have infringed on the spirit if we are to judge them accurately for they are.