Opinion Estoppel

Question

As I understand it, estoppel is the notion that once a position is taken (i.e. all swans are white) that another contrary position may not be taken (some swans are black).

That being said, counsel was hired by a board member to provide an opinion on a corporate procedural matter. The attorney replied with the position that person A is not a 'black swan' and then issues a follow-on opinion two years later to opine the same person A is a 'black swan'. The paper opines a procedure to address the black swan issue, however, the board never implemented the procedure.

The standard boilerplate is provided at the end of the opining indicating that ABC lawfirm does not have an obligation to update the client as the law changes and that the opinion is not legally binding.

If the two opinions were presented in a court, does the notion of estoppel apply (in the sense that the opinion has flip-flopped and is not solid)? Is the latter opinion weakened (from the viewpoint of a judge or arbitrator) by the notion of estoppel?

The opinion's procedure was not implemented for several years, does the inaction create precedent to support continuation of the current process?

Answer 1

The question somewhat misstates the concept of estoppel in a legal sense. Estoppel does not mean that one is prevented from changing one's opinion. Estoppel means that when one gives a third party cause to rely on one's position, by word or conduct, one cannot then adopt an altered position and use it to legally attack that third party. For example, if one has invited a person onto one's land, one cannot turn around and sue them for trespass.

In the case in the question, the Board hired counsel to give them an opinion, which was given. Two years later, a contrary opinion was offered, along with a recommendation for action, which was not followed. No third party was induced to rely on either opinion to its detriment. No estoppel seems relevant. And by the way estoppel is an equitable defense that would be raised by the third party, not unlike the defense of "clean hands".

If the board acted on the first advice to its detriment, and thinks that their counsel was negligent in not having gotten the advice correct the first time, they might possibly have a case for legal malpractice, but only if they can get experts (other lawyers) to say that their counsel was in fact negligent , and also prove that this did in fact harm them. If they didn't act on the advice, harms seems less likely, although the details would matter a lot.

Answer 2

Estoppel

Estoppel is a very disparate concept in equity and law that captures a lot of very different things under one banner.

From the context, you seem to be referring to promissory estoppel. In general, the best (re)statement of it in English Law (US law is close enough at this bird's eye level) was given by Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] 1KB 130:

There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise was going to be relied upon by the person to whom it was made, and which in fact was so acted on. In such cases the courts have said that the promise must be honoured ..."

Your situation has nothing to do with estoppel

The lawyer has expressed an opinion, they have not made a promise: therefore, no estoppel. Further, it appears that the opinion (either of them) have not been relied upon: therefore, no estoppel.

The value of a lawyers opinion

$0.00000000000000000001

Lawyers have lots of opinions about both the law and the facts. A judge's/arbitrator's role is to listen to those opinions and decide between the conflicting ones which the law or the evidence supports. There are always different opinions although rarely, as here, from the same council.

The role of the Board

Assuming it is necessary for the Board to determine if the person is/is not a 'black swan' then the Board must exercise its own skill and judgment to do so in accordance with the relevant constitution, prior resolutions, and the law. They are certainly not obliged to use the procedure suggested by the lawyer if they consider they have a better way of deciding.

The lawyer's opinion(s) may (or may not) inform the Board's decision and the existence of the opinion(s) could be evidence that the Board had (or had not) exercised their judgment correctly. Where there are conflicting opinions as here, this is likely to show that the particular issue is not clear cut and that any decision the Board made is likely to be defensible.

Answer 3

No.

There are lots of ways to be estopped from taking a certain position in court. These include judicial estoppel, equitable estoppel, collateral estoppel, promissory estoppel, and res judicata.

Generally speaking, estoppel requires (1) that you take a certain position and (2) that subsequent events make it unfair or otherwise inappropriate for you to try to change your position.

The most common examples are situations where you take a position and a court rules on it one way or another, making it a waste of time for the court to repeat the factfinding exercise.

In other cases, you might take one position that induces a person to take actions and then be effectively estopped from denying that position when someone acts in reliance on that position and it turns out not to be true.

But I've never seen any cases suggesting that receiving a legal opinion estops you from taking actions contrary to that opinion. The entire point of lawyers is to provide advice, not to make decisions; courts would generally be pretty unreceptive to the idea that a client is obligated to believe whatever its attorneys say.

But the letter may still be useful.
Depending on the nature of the claim, though, the existence of the opinion, the failure to adhere to it, and the sudden change with respect to Person A may still be valuable evidence. If the claim turns on questions of good faith, fair dealing, equal protection, due process, etc., Person A may be able to use that letter to demonstrate that actions taken against Person A were not taken based on the criteria discussed in the second letter, but rather due to some intervening event.