This legal article aims to provide clarity on the concept known as formal Legal Opinion vs. Legal Advice, and to:
- highlight the benefits of seeking such an opinion from a law firm or legal expert,
- explain what clients can expect from this service when engaging a law firm,
- identify when it is appropriate to seek a legal opinion, and
- demonstrate how it can assist in making strategic decisions in litigation cases or other matters where law is heavily involved.
While the law lacks a singular, universally accepted definition of legal opinion, common law jurisdictions boast a long-standing tradition of utilizing legal opinions. Standards and principles have been established to guide the preparation of qualified legal opinions for diverse commercial transactions, legal situations and disputes.
By procuring a legal opinion, clients benefit from the insights and expertise of legal professionals, ensuring a thorough understanding of the legal landscape surrounding their case or specific circumstance. This advice plays a crucial role in making well-informed decisions and formulating effective court strategies or business transactions and this is why clients rely on it to guide their actions and protect their interests.
The Significance of Legal Opinion
Legal Opinion – formally expressed advice based on the expert knowledge of professional lawyers, plays a pivotal role in the realm of law. It takes the form of a written document, typically prepared at the behest of a client, wherein lawyers outline their comprehension of legal provisions in light of specific circumstances surrounding a given case. Importantly, the recipient of a legal opinion possesses the right to rely upon the advice furnished within this document.
While a single, universally accepted definition of legal opinion does not exist within the law, the practice of legal opinions in common law countries boasts a rich heritage. Over time, clear standards and principles governing the preparation of qualified legal opinions have been established to address diverse legal situations and disputes. Thus, it can be defined as a well-crafted written response by a lawyer to a legal matter.
Also, Legal opinion is commonly prepared and updated just prior to a transaction, contract’s execution, or a submission of a memo to court, hence ensuring adherence to prevailing laws and legal practices. Moreover, it finds utility in litigation, serving as a valuable tool for proficiently drafting lawsuits and formulating robust courtroom strategies by offering additional legal analysis or arguments based on evidence. In the process of drafting a legal opinion, we, lawyers bear the responsibility of conducting meticulous legal and factual research, analysis, and facts verification.
By virtue of its comprehensive nature, legal opinion safeguards the interests of parties involved in legal matters and serves as a crucial instrument for clients and legal professionals alike, providing guidance, clarity, and insights into the complex web of laws and regulations.
With the evolving legal landscape and the exponential growth of business and trade across geographical borders legal opinion remains an indispensable asset, ensuring informed decision-making and fortifying the legal rights and positions of individuals and entities.
What is the Difference Between Legal Advice and Legal Opinion?
At this stage we want to make a point as to the difference between Legal Opinion and Legal Advice, which in many cases are used interchangeably, however there is a distinction. It is important to note that a legal opinion should not be used as a substitute for legal advice and the parties to a transaction will need to ensure that they receive extensive legal advice in the matter concerned prior to the issuance of such an opinion.
An opinion is issued expressing legal conclusions about and/or legal analysis of a transaction or matter based on past or present facts, which is relied on by the addressee of the opinion. The main purposes of a legal opinion are:
- To inform the addressee of the legal effect of a transaction or matter.
- To identify legal risks that the addressee should consider further and evaluate.
An example is in a cross-border transaction for which the client may seek legal opinion from lawyers in a foreign jurisdiction inquiring if the transaction documents are indeed valid and in compliance with the local laws if a litigation could be successful in the jurisdiction and if could be enforceable.
A legal opinion is not a substitute for legal advice, the main key difference being that a legal opinion is an attorney’s analysis based on past or present facts, while legal advice is an attorney’s counsel and guidance as to what future actions the client should take.
The Demand for Legal Opinion in Litigation is On the Rise
The demand for legal opinion services in the UAE has experienced a notable upswing in recent years. This surge can be attributed to several factors that reflect the evolving business landscape of the region, the rise of litigation cases.
The rise in cross-border transactions has necessitated a greater need for expert legal advice to navigate the complexities of international business agreements that originate at one jurisdiction but are realized in another or number of other jurisdictions. UAE is a great example of a country showcasing fast growth of international trade, and phenomenal business growth within the country where Free Zones are offering favorable environment for business set-up and branch out. These factors certainly created a heightened demand for “legal opinion”, as clients aim at ensuring compliance with regulations and a tool to mitigate business and financial risks.
Recently, we have noticed an increased demand for legal opinion, mostly in the context of litigation and we pin this down to the fact that in preparation for court proceedings clients use the opinion to bring clarity and understanding to a matter or situation they may have perceived very differently from the factual situation. The escalating number of disputes across various legal jurisdictions has further emphasized the significance of seeking legal opinion as a means of safeguarding business interests. By reaching out for legal opinion to assist in litigation, clients want to equip themselves with a professional assessment of the strengths and weaknesses of their case based on facts, law, and interpretation. This opinion enables them to make informed decisions, strategize effectively, and enhance their chances of achieving a favorable outcome within the legal proceedings or abandon legal proceedings completely.
What is the Purpose of Procuring Legal Opinion?
Our clients need to be clear “WHY” they are approaching a professional for legal opinion and “WHAT” they wish to achieve through procuring this service again differentiating between the outcome of a legal opinion and legal advice.
We strongly recommend they proceed with legal opinion if they wish to achieve any of the below listed outcomes:
- know the legal effect(s) of a transaction or legal matter,
- identify and consider any legal risks associated with past performed action or in the same respect inaction on a matter,
- prove to a regulatory body that one has been acting responsible in the application of the law,
- prepare for argument submission that is based on past actions, or
- prepare for formal negotiation or mediation.
Legal Issues Covered by Legal Opinion
A legal opinion document addresses various aspects and considerations, including:
- Compliance with the law and client obligations: The legal opinion assesses the client’s compliance with applicable laws, regulations, and other legal obligations relevant to the matter at hand.
- Government registration requirements: It examines whether there is a need for the registration of property or other assets, ensuring compliance with the necessary procedures and regulations.
- Approval procedures and permits: The legal opinion evaluates the adherence to both internal and external approval procedures, including obtaining required permits from the client and their partner.
- Specific transaction terms: It provides a thorough analysis of the key terms of the transaction, such as the settlement/dispute procedure, ensuring a clear understanding and steady implementation.
- Rights and obligations of the parties: The legal opinion examines the rights and obligations of all parties involved, ensuring that they are properly addressed and protected within the transaction.
- Protection of client rights and interests: It focuses on safeguarding the interests of the client throughout the transaction, assessing potential risks and proposing measures to mitigate them.
- Remedies for violated rights: The legal opinion explores the availability of legal measures to protect any violated rights, providing guidance on the appropriate actions to be taken under specific conditions.
These considerations form the foundation of a comprehensive legal opinion, providing clients with valuable insights, guidance, and strategies to navigate their legal obligations and protect their interests effectively.
Structure of a Legal Opinion Document
A legal opinion is typically structured as follows:
- Background: This section provides a comprehensive overview of the matter at hand. It includes detailed information about the parties involved, the subject matter, and the terms of the agreement. Crucial provisions of the document defining the transaction are also outlined to establish the context of the legal opinion.
- Analysis of Constituent Documents and Regulatory Legal Acts: In this section, the lawyer analyzes relevant statutory legal acts, rules, and regulations that govern the specific area related to the issue at hand.
The legal opinion considers the actual circumstances of the case and involves a comparison of both the factual and legal grounds. The lawyer may also consider and review prevailing judicial practices and precedents set by courts, which serve as a basis for analyzing the specific circumstances of the situation and use them as guidance. - Assumptions and Conclusions: The legal expert opinion presents concise conclusions derived from the conducted research and analysis of the case materials. It outlines the outcomes of the legal opinion documents and provides practical recommendations for resolving the issue raised by the client. This section aims to guide the client towards an informed decision or course of action.
By adhering to this structured format, a legal opinion document offers a comprehensive assessment of the legal aspects surrounding a particular matter, enabling clients to make well-informed decisions and navigate the legal landscape with confidence.
Our Responsibility for Legal Opinion
As legal professionals, it is our duty to guide and educate our clients regarding the appropriate timing and expectations associated with seeking a legal opinion. The quality and effectiveness of a legal opinion heavily relies on the availability of comprehensive and well-organized historical information and sufficient time. In order to provide a well-prepared legal opinion, it is crucial that clients furnish us with factual and pertinent details pertaining to their case, allowing us sufficient time to thoroughly analyze the matter.
For lawyers to prepare legal opinion is all about clear understanding of facts, the sequence of evidence, supporting documents, and the preparation of evidence, which must be conducted with precision and tailored to the specifics of the case at hand.
In our legal practice, we often come across clients who seek our advice/opinion without having sufficient evidence to substantiate their position. Often the evidence we receive is gathered from emails, messaging platforms or other informal communication tools and is presented in scattered manner, which represents challenges when it comes to organizing the necessary information for a thorough comprehension of the situation at hand. It is imperative for clients to provide the complete file in a single well-organized submission, as each piece of evidence contributes to the overall “puzzle”, providing us with valuable insights to construct a well-informed opinion. In certain instances, a single piece of evidence can significantly alter the course of a case, thereby influencing the final opinion we give to our clients. Therefore, the inclusion of all relevant evidence, presented to us in an organized and detailed manner is vital in ensuring an accurate and comprehensive assessment of the matter, allowing us to offer the most effective legal guidance to our clients, empower them to make informed decisions and optimize the benefits derived from seeking legal expertise.
Also, we need to address a very important point – the time required for the preparation of a legal opinion. Again, it is the lawyers’ responsibility to set realistic expectations around the time needed to prepare a legal opinion. The duration can vary depending on the complexity and scope of the legal matter at hand. Adequate time must be allocated to allow for thorough research, analysis, and consideration of all relevant factors. While some legal opinions can be prepared within a relatively short timeframe, others may necessitate more extensive research and evaluation, requiring additional time and this needs to be communicated clearly. It is crucial for clients to understand that a well-prepared and reliable legal opinion cannot be rushed, as it requires meticulous attention to detail and comprehensive examination of the relevant legal principles and factual circumstances. By setting realistic expectations and allowing sufficient time for the preparation of a legal opinion, clients can ensure that they receive a comprehensive and well-founded assessment of their legal matter.
Finally, the presence of clients who have embarked on business expansion or acquisitions without prior guidance from lawyers has spurred a realization of the value and importance of legal opinion/advice in mitigating potential pitfalls. As businesses in the UAE become increasingly aware of the benefits and protection offered by legal opinion/advice, the demand for these services continues to grow.
Should you have any questions or may need a legal opinion or advice on a commercial/business transaction or a legal dispute in the UAE, please feel free to reach out to our Managing Partner, Mr. Ashraf El Motei, at [email protected].
