Shamilah Grimwood-Norley, head of Banking and Finance at Bowmans, agrees and notes that in a project financing context, a number of opinions are needed on debt financing transactions, with the issuance of legal advice sometimes seen as a perfunctory, the final step in the closing process. However, from the point of view of the beneficiaries (usually the group of lenders), legal advice, and more specifically the commitment on the content of the legal opinion, is a valuable tool. A notice already used in the negotiation of debt financing documents can identify positions that the group of lenders can use optimally to reduce its risks. An important point is that a notice indicates who can rely on the notice and indicates that it is intended for the recipient or, in the case of a union transaction, the principal union. Similarly, it should be noted that notice may be used for a limited period of time after the date of issuance and that this application is not permanent. Legal advice will not focus on whether transaction documents are retainable and enforceable to non-subject financial parties, such as banks, any installation agent or a security agent. This applies regardless of the responsibility for the creation of a financial party. Unlike legal advice, which is often unwritten, legal opinions are written statements expressing legal conclusions about a transaction or case, or a legal analysis of a transaction that the beneficiaries of the opinion can rely on. In the vast majority of credit transactions, English legal advice is required. For transactions involving a cross-border element, it is also necessary to conduct a local legal opinion from any competent jurisdiction. However, legal advice does not replace legal advice that, in a transactional context, is likely to be more important.
Jason Wilkinson, also a partner at Bowmans, comments on the difference between poor legal advice and sound and solid legal advice, three of the main characteristics of good legal advice: legal advice is one of the most important documentary conditions that preside over credit transactions. Legal advice is a letter that makes submissions on legal issues. It does not cover substantive issues. The alarm bell should be given to the lender when legal advice does not identify the usual risks and/or specific issues specific to the nature of the financial instrument or counterparty. Such an omission may indicate that the lawyers who drafted the notice may not have fully applied their opinion and identified and understood the risks and essential problems. The submissions provide lenders with valuable assurance that the lawyer making the comments correctly consulted the transaction and formulated the views expressed in the notices, but should not be considered a guarantee or compensation against losses that may arise when the financing transaction becomes furious. A legal opinion is an opinion that expresses legal conclusions about a transaction or case and/or a legal analysis of the issue.