Resource Law Reforms Commission to improve business laws – Oteng-Gyasi

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Resource Law Reforms Commission to improve business laws – Oteng-Gyasi

An economist and lawyer, Mr. Tony Oteng-Gyasi, has said the Ghana Law Reform Commission needs to be strengthened and adequately resourced to aid national development and economic growth.

He said the commission ought to be empowered to consult with the best minds, both locally and internationally, on reforms carried out on any aspect of the law.

The former president of the Association of Ghana Industries (AGI) made the call when he delivered a keynote address at a book launch in Accra.

He said law reforms were an integral part of private sector growth and the more effectively they were done, the higher the likelihood they would engineer economic growth.

He noted that laws needed to keep abreast of economic development and socio-cultural change but that could not happen if the national institution in charge of reforming the law to meet modern trends was under-resourced and inadequately equipped to deliver on its mandate.

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AB & David

Mr Oteng-Gyasi gave the advice on June 9 when he delivered the keynote address at the launch of a book on company law in Accra.

Titled ‘Modern principles of company law in Ghana’, the book is authored by Mr Ferdinand Adadzi, a Partner at AB & David Law Firm.

It examines the legal regime governing companies in the country with specific emphasis on the Companies Act, 2019 (Act 992).

Mr. Oteng-Gyasi was a member of the committee of experts that led the process to replace the now-defunct Companies Act 1963 (Act 179), starting from 2008 to the eventual passage of Act 992 in 2019.

Review business laws

While commending the committee and the government for the passage of Act 992, the chairman of the Ghana Integrated Aluminium Development Corporation (GIADEC) said the efforts must continue to reform the remaining business laws.

He said the original intention was to review all the business laws of the country, but that stalled after the passage of Act 992 and a Corporate Restructuring and Insolvency Act, 2020 (Act 1015).

“There are several other business laws which require attention. In this regard, the Ghana Law Reform Commission must be strengthened and adequately resourced as an important part of national governance.

“The commission must have the means to consult with the best minds, local and international, in whatever area of the law they are working on. Law reform has to keep abreast of economic development and socio-cultural change. Prompt law reform will surely lessen the burden of the Attorney-General’s office and enhance both economic activity and democracy, generally,” he told the participants made up of mostly lawyers.

Judgment debt

The former chairman of the University of Ghana Council also called for legislation to limit the amount of damages that a contractor for a government project could claim in the event of default or breach.

The industrialist said a law to limit the amount of damages should also apply to the government in the event that the contractor failed to satisfy its side of the contract.

He explained that putting a ceiling on damages in public sector contracts was the surest way to tackling judgment debts, which had generated national debate after increasing in volumes and values in recent times.

Concern

The chairman of the Tropical Cable and Conductor Limited (TCCL) said the concern by many in the country about judgment debts incurred by governments was a subject that should be tackled both during contract negotiation and ultimately by legislation.

“In the private sector, it is common to limit damages arising out of breach contractually. The time has come to have such limits drafted and standardized in all government contracts as a matter of policy.

“Eventually, legislation should be passed to limit judgment debts. There are termination formulas that will spare the public purse such huge payments. Law can and should help solve our problems or limit them at the very least,” he added.

Private sector experience

Mr. Oteng-Gyasi later explained in an interview that damages arising from contracts in the private sector was already limited and wondered why the government would not apply that experience into contracts involving the public sector.

“You can put a term in the contract which says effectively that this is the maximum an aggrieved party can claim. It does not have to be a figure.

“There are formulae for that and we can include that in the law,” he said.

He said the ceiling could also apply to the interest on the damages to help discourage contractors from using the judgment debt window to exact resources from the State.

He said while the call for legislation might be too drastic, it was the surest way of tackling the judgment debt conundrum, which had cost the national purse billions of cedis in the past.

“Even if the ceiling on damages to be claimed is in the contract, people will not put the clauses there. But if it is law, you will be forced to abide by it, and that is why we should actually make it into a law that every government contract should have clauses that limit damages in case of default, breach of contract or litigation.

“So that if you sign a contract you will know, and that way, it will force people to execute their sides of the contract on time and according to the terms,” Mr Oteng-Gyasi, who is also a lawyer, added.

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