Readers might be forgiven for thinking that Barrick is as much of a law firm as a gold miner. It seems the corporate legal department has been very busy lately.
Last December Blanchard & Co. filed a lawsuit claiming that Barrick and J.P. Morgan conspired to suppress the worldwide price of gold to the benefit of both defendants. Barrick vigorously denied the allegation and has filed various motions to dismiss Blanchard’s suit.
In March a Texas judge dismissed a motion to file a class-action suit against multiple defendants including Barrick in matters relating to the failure of Bre-X Minerals. The legal wrangling over Bre-X has been going on for years and years. Imagine the lawyer-hours that went into the successful dismissal.
And just last week a U.S. District Court ruled in favour of Barrick and against the U.S. Environmental Protection Agency. That action involved the manner in which moving waste rock must be reported. It must have taken tremendous legal resources to beat the powerful E.P.A.
There is no point in suing a company with no money or assets. As we said last week, companies with the deepest pockets seem to attract lawsuits, and the deepest pockets are perceived as belonging to gold producers. I suppose every litigant thinks he will win and win big, but that is not possible every time against a corporation such as Barrick. The cost of mounting defences to even frivolous actions is the same as fighting those with merit. Too bad the money that must be spent on lawsuits couldn’t be given to the shareholders instead.