State enterprises and attorneys’ fees

It should be axiomatic that state enterprises are formed to further national objectives as articulated by the government, not for political patronage. One can understand that on a change in the political party forming the government, there will be a search for evidence of patronage or wrongdoing to portray the other losing political party in a bad light. This is a tried and well-tested technique.

This has often led to long-running cases which seem to meander along with no result, either because the court process is too slow or the evidence is weak. Directors are human and will make bad decisions. The difficulty is in determining whether the directors exercised due care and attention in the best interests of the company. Determining this takes time, which translates to expensive legal costs.

It is noteworthy that most cases involving former state enterprise directors have been pursued in civil, not criminal courts. In a civil case, the company must prove that it suffered a loss because of the directors’ imprudent or inappropriate actions. This means that the company is the plaintiff, not the state.

Some attorneys general have appeared to be the principal protagonists in these cases, either initiating the actions or revoking them, in the process reducing directors to rubber stamps.

One CEO of UDeCOTT is reported in the press as saying that the attorney general had conduct of the matter initiated against UDeCOTT’s directors. The cases against the Petrotrin and Eteck directors were initiated by one attorney general and were dismissed on the advice of another in the new administration. Ultimately, taxpayers paid the bill.

The case against selected UDeCOTT directors has meandered through several procedural appeals.

Initiated under the prime minister Persad Bissessar’s administration in 2012, the case survived two PNM administrations and is still alive on her return in 2025. The matter is yet to reach trial. In the 13 years since this action was initiated, attorneys on both sides have died, and the judge has changed three times.

Since returning to the office, Prime Minister Persad Bissessar has often complained about excessive legal costs associated in state enterprises and “eat ah food lawyers”. NGC’s Chairman, when contacted for comment on the legal fees associated with the failed Beetham wastewater plant, said that the records show no evidence of competitive bidding, tendering or board oversight or approval in the retention of attorneys for the case. He is quoted as saying that there will be no feeding at the trough under his chairmanship.

This is an interesting comment from the NGC Chairman, who was also involved in the so-called “A” team, which was paid millions to pursue cases involving state enterprises. Indeed, legal and accounting fees have never been part of a competitive bidding process by state enterprises.

As a practising attorney who has also been faced with similar allegations and commentary, NGC’s Chairman should be aware that the Procurement Act specifically exempts legal and accounting fees from the competitive tendering process.

Various attorney generals have revealed a worrying trend to pay exorbitant legal fees to attorneys who are perceived to be favoured by the party holding office. We welcome the comments of the current Attorney General that he will pay special attention to these matters. Accountability is a two-way street.