An­tho­ny Wil­son

Last Thurs­day, af­ter hav­ing read the com­men­tary in this space head­lined "Is new Dook­er­an plan fair and eq­ui­table?" a Cli­co pol­i­cy­hold­er wrote to me ask­ing whether I would ad­vise her to take the mon­ey that the Gov­ern­ment is of­fer­ing her or should she wait for the out­come of the le­gal chal­lenges against the re­vised bailout pro­pos­al of the in­sur­ance com­pa­ny that the Kam­la Per­sad-Bisses­sar-led ad­min­is­tra­tion has tabled.My lay­man's ad­vice to her was that I was un­able to pro­vide her with spe­cif­ic ad­vice be­cause I did not know her fi­nan­cial sit­u­a­tion, but that if she were in des­per­ate need of her mon­ey, she should ac­cept the Gov­ern­ment's of­fer and hope for the best.I al­so told her that be­cause the bailout was be­ing of­fered in al­pha­bet­i­cal or­der, that she would not be re­quired to make the de­ci­sion un­til Feb­ru­ary next year.The ad­vice to take the of­fer on the ta­ble ($75,000 in cash plus 20 ze­ro-coupon bonds, ten of which may be ex­changed for units in an in­vest­ment trust com­pa­ny called NEL 2 in De­cem­ber 2012) might seem strange from some­one who has crit­i­cised this Gov­ern­ment's han­dling of the Cli­co bailout from al­most im­me­di­ate­ly af­ter the an­nounce­ment of the pol­i­cy by Fi­nance Min­is­ter, Win­ston Dook­er­an, dur­ing the read­ing of the 2011 bud­get on Sep­tem­ber 8, 2010.

My think­ing be­hind the ad­vice to the woman is that she would have been pre­vent­ed by this ad­min­is­tra­tion's pol­i­cy from ac­cess­ing her lump­sum in­vest­ment in Cli­co at ma­tu­ri­ty and pre­vent­ed, as well, from re­ceiv­ing the month­ly in­ter­est on that lump­sum be­cause of Mr Dook­er­an's spu­ri­ous claim about ghost ac­counts at the in­sur­ance com­pa­ny.In oth­er words, all of the plans that she had for her mon­ey-which may have in­clud­ed pay­ing off her mort­gage, cre­at­ing a nest-egg for her re­tire­ment or see­ing to the ed­u­ca­tion of her child-would have been de­railed by the ac­tions of the Peo­ple's Part­ner­ship ad­min­is­tra­tion.In ef­fect, giv­en the fact that she has been pre­vent­ed ac­cess to her mon­ey, both the lump­sum and the in­ter­est, for more than 15 months, she can well ar­gue that she has been placed un­der eco­nom­ic duress by the Gov­ern­ment's poli­cies; that a metaphor­i­cal gun has been placed to her head and she is be­ing told to sign the doc­u­ment or risk los­ing every­thing that she worked all her life to ac­quire.Duress, ac­cord­ing to Black's Law Dic­tio­nary, is de­fined as a "threat of harm made to com­pel a per­son to do some­thing against his or her will or judg­ment; es­pe­cial­ly a wrong­ful threat made by one per­son to com­pel a man­i­fes­ta­tion of seem­ing as­sent by an­oth­er per­son to a trans­ac­tion with­out re­al vo­li­tion."

The con­cept of eco­nom­ic duress is well found­ed in the com­mon law un­der which T&T op­er­ates.Ac­cord­ing to the Wikipedia, the el­e­ments of eco­nom­ic duress in­clude: a wrong­ful or im­prop­er threat; the lack of a rea­son­able al­ter­na­tive (but to ac­cept the oth­er par­ty's terms; the threat ac­tu­al­ly in­duces the mak­ing of the con­tract and the oth­er par­ty (in this case, the Gov­ern­ment) caused the fi­nan­cial dis­tress. Wikipedia al­so cites the 1976 Privy Coun­cil case of Bar­ton v Arm­strong to make the point that any con­tract that has been en­tered in­to as a re­sult of duress can be void­ed: "An in­no­cent par­ty wish­ing to set aside a con­tract for duress to the per­son need prove on­ly that the threat was made and that it was a rea­son for en­try in­to the con­tract; the onus of proof then shifts to the oth­er par­ty to prove that the threat had no ef­fect in caus­ing the par­ty to en­ter in­to the con­tract."It is sur­pris­ing that none of the at­tor­neys who rep­re­sent the Cli­co lit­i­gants have as yet put for­ward the ar­gu­ment that an ar­gu­ment can be made that by with­hold­ing ac­cess to their lump­sum in­vest­ments and in­ter­est for more than 15 months, the Gov­ern­ment has ap­plied eco­nom­ic duress to the Cli­co pol­i­cy­hold­ers and the con­tracts that are be­ing signed run the risk of be­ing void­ed on that ba­sis.

I raise the point about eco­nom­ic duress be­cause back in Sep­tem­ber 2010, two weeks af­ter Mr Dook­er­an de­liv­ered the bud­get, this col­umn raised the is­sue of the Dook­er­an Plan be­ing a mas­sive trans­fer of wealth from in­di­vid­u­als who had worked hard and saved their mon­ey.I ar­gued more than a year ago: "Is it in the na­tion­al in­ter­est that the Gov­ern­ment should be par­ty to the fa­cil­i­ta­tion of a mas­sive trans­fer of wealth from thou­sands of in­di­vid­u­als...to a few in­di­vid­u­als and a cer­tain fi­nan­cial in­sti­tu­tion?"The fact that the Gov­ern­ment has struc­tured the so-called Cli­co bailout to of­fer the pol­i­cy­hold­ers $75,000 cash and the 20 ze­ro-coupon bonds af­ter more than 15 months (while fail­ing to prop­er­ly de­fine NEL 2 and in­di­cat­ing that it would not be avail­able un­til De­cem­ber 2012) is clear­ly meant to hold the pol­i­cy­hold­ers to ran­som, while en­sur­ing that cer­tain friend­ly in­di­vid­u­als and in­sti­tu­tions are set to reap hun­dreds of mil­lions.And it does not have to be this way: Cli­co's 56 per cent stake in MHTL and its 32.3 per cent stake in Re­pub­lic Bank are worth $13 bil­lion, which is more than enough to re­pay all of the pol­i­cy­hold­ers 100 per cent of their in­vest­ments.

Why is the Gov­ern­ment choos­ing to bur­den tax­pay­ers by spend­ing an ad­di­tion­al $9.5 bil­lion ($7.5 bil­lion in debt and $2 bil­lion from the Con­sol­i­dat­ed Fund) on this so-called bailout when it has the op­tion of sell­ing Cli­co's as­sets and pay­ing back the pol­i­cy­hold­ers-as set out in the Mem­o­ran­dum of Un­der­stand­ing signed by for­mer Fi­nance Min­is­ter Karen Tesheira and for­mer CL Fi­nan­cial chair­man Lawrence Duprey on Jan­u­ary 30, 2009-or by bundling Cli­co's as­sets in­to an in­vest­ment hold­ing com­pa­ny (like NEL) and trans­fer­ring units in that en­ti­ty to the pol­i­cy­hold­ers in ac­cor­dance with their in­vest­ments?By the way, there are clear ad­van­tages in bundling the Cli­co as­sets in­to an in­vest­ment hold­ing com­pa­ny like NEL rather than the in­vest­ment trust com­pa­ny that the Gov­ern­ment now pro­pos­es.