Simple tips for surviving litigation
Peter Keel and Norm Lucas, Partners, Litigation and Dispute Resolution
Peter Keel
It's a popular misconception that we as litigation lawyers are trying to get our clients to engage in litigation. The truth of it is the opposite. It does us no good to have clients dissatisfied with a protracted and expensive piece of litigation. We would prefer to see you either avoid litigation or, if you are unlucky enough to be caught in it, to minimise the cost and the collateral damage. So with that in mind, we have put together a few tips with a view to exploring how you might minimise the risk of being in litigation, or the effect on your corporation and the costs.
Norman Lucas
So, I guess firstly avoiding litigation. The first tip is document, document, document. By that I mean three points about documents.
First, there is greater scope for argument and disagreement and hence litigation where you haven't got an agreement or an understanding which is actually reduced to writing, that's obvious. If you don't have a written agreement you are going to have one person's word against another person's word or you are going to have contemporaneous documents which are probably going to be inconclusive. So try to document things.
But if you bother secondly to document what the agreement is, then spend some time and money getting it right. Near enough isn't good enough, near enough means ambiguity and ambiguity unfortunately means litigation.
Remember too it is often the simple things that people get wrong with documents, such as not putting the correct annexures or schedules, or whether the correct parties are named.
The third point about documents is that, having documented your agreement, you should make great efforts to actually retain the document in a safe place where you can locate it easily when litigation is required.
Peter Keel
The number of times that we have run a piece of litigation where the client hasn't been able to track down the original document, the original agreement, surprises us. Of course you are going to have an agreement if it is not in writing, but the problem is that it leads you into all sorts of evidentiary difficulties in trying to prove what the terms of the agreement were. So if the agreement is important enough for you, it is important enough for you to write it down and to get it right.
Norman Lucas
And a bit of money spent back then may save you a lot of money trying to have to that evidentiary argument about what the agreement is.
Peter Keel
Exactly right.
Now if you are making a decision to commence litigation, I suppose the general rule is don't litigate on principle. The circumstances where you might want to litigate on principle are rare and it is a very very expensive luxury. It is a decision that ought to be made bearing in mind the same costs and consequences are involved as if you are suing for a sum of money. For example, you have to work out what your probable legal costs are. In order to do that you've got to fully brief your lawyers. We will talk about that in a minute. So the costs are going to mount with discovery, the costs are going to mount with executive time and the costs are going to mount when you have to look after your reputation. And remember these days, corporations can't sue in defamation to protect their corporate reputation.
Norman Lucas
So let's assume now Peter that despite your best endeavours you are actually stuck in a piece of litigation. Here are a couple of tips that will help you reduce your exposure and/or your costs in that litigation.
The first is all about communication - communicate effectively and manage the relationship with the lawyers both internally and externally. That just means tell them what you want. What are the commercial objectives you are trying to obtain and at what reporting do you want during the course of the matter, in terms of frequency and format and things like cost estimate. Give them enough information that they can be reliable and useful for you.
The second thing about communication and managing your lawyers is to try to have a central focus point within the organisation for the giving of instructions. Our experience is that if there are multiple people giving instruction it adds to the cost, and adds to the confusion which nobody needs in a piece of litigation.
The third point is if your strategy which has been communicated changes, make sure you communicate the change.
And finally, brief your lawyers internally and externally in a sensible way - give them all the relevant information in a format which is easily digestible so that they can give you the advice that you need.
Peter Keel
Exactly. So manage your lawyers. But you also have to manage your documents.
There are a couple of aspects to this. The first one is the obvious one - emails.
You have got to have email protocols. Those email protocols have at least got to be that everybody who was engaged in a transaction puts and files their emails in a particular folder. Those folders have got to be in order and order according to project. Now that may sound like a tedious and pedestrian task but I promise you that when it comes to a piece of litigation nothing is going to multiply your costs like a proliferation of emails.
And on that point can I say something about the reply to all button. Eliminate it. And if you can't eliminate it, at least make sure that people understand that they should use it sparingly. People should ask themselves the question, does everybody on this recipient list need to see the report that I am sending them? Does everybody need to see my comments about that particular report?
And remember, emails are seldom, if ever, deleted. They disappear into the ether of course, and you may not be able to easily recover them, but that won't obviate the need for you to discover those emails in a piece of litigation if a court makes the order and the cost of recovering emails from the ether is very very high.
Norman Lucas
And frankly Peter, it's not just emails is it. It's discovery of documents generally. It is a point where costs tend to spike and also often can expose a party if they don't give adequate discovery. So get it right the first time. How do you do that? Have a person within the organisation who has central responsibility for actually giving instructions in relation to discovery to try to make sure it is done properly.
You will always find there'll be people in the organisation who don't understand their obligations and you will also find that there are going to be documents and places that no-one ever thinks about, such as minutes, diaries, archive materials and notebooks. If you don't get those and discover them it is going to cause you problems later on. Don't forget that a party's case can be immeasurably put on the back foot by giving discovery in a cavalier fashion or not giving adequate discovery, and it can often distract you from running the substantive matter in the case on which you might have a very strong argument.
Peter Keel
Exactly Norm. One of the issues that we always find ourselves facing is the question of privilege - that is, when is a document privileged? What can I do with privileged documents? Can I prevent the other side from seeing documents which I assert as privileged?
Privilege is actually pretty difficult and a document is only privileged if it is a communication passing between a lawyer and a client for the dominant purpose of the giving or receiving of legal advice or for litigation. It is a pretty strict test. Now of course, you can take that document and you can disseminate it in a limited way - for example, you can give a copy of it to the board of directors of the company and that copy will not lose privilege - but you can also lose or waive privilege on documents. And we do that by acting in a manner which is inconsistent with maintaining the privilege and which discloses the substance of the privilege document.
So the publication of your legal advice in a public document is acting in a manner which is inconsistent with the maintenance of the privilege, and it disclose the substance of the advice. You have waived privilege by that disclosure on your legal advice and probably on documents associated with the creation of that legal advice. So be very careful to maintain privilege. Don't make spurious claims because a privilege fight in court is often hardly worth the effort.
Norman Lucas
So it is trite isn't it really that litigation is expensive and best avoided. But hopefully if you following some of these tips where litigation can't be avoided you might survive the litigation and it will be less costly then would otherwise be the case.
