ANNUAL REVIEW

Litigation & Alternative Dispute Resolution 2016

November 2016  |  LITIGATION & DISPUTE RESOLUTION

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Today, litigation is more often complemented or replaced by alternative dispute resolution methods, to help resolve commercial conflict. Mediation, arbitration and various combinations of the two provide parties with a cost and time effective path to resolution, in some cases avoiding litigation. Parties are particularly drawn to arbitration for its international application, allowing them to resolve transnational disputes in a timely and private manner, safe from the potential embarrassment of a lengthy and public court case.

 

UNITED STATES

Todd Ohlms

Freeborn & Peters

“Some of the current market challenges involved in commercial litigation in the US include containing e-discovery costs and accurately projecting the expected costs of litigation and the likely result. Recent changes to the Federal Rules of Civil Procedure should help the former, but it is taking time for counsel and the bench to understand the implications of these revisions and modify their collective approach to e-discovery. As for the latter, firms are investing more resources into budgeting efforts and are using tools such as decision trees to make better strategic decisions before going too far down the path of litigation.”

 

CANADA

Junior Sirivar

McCarthy Tétrault

“The challenging commodity price environment that confronted Canada’s resource-based economy dominated 2015 and most of 2016. This has brought renewed focus on the rights and obligations that are impacted when insolvency threatens to overtake exploration and productios companies in the mining, quarrying and oil & gas extractive industries. There appears to have been an increase in the variety of commercial disputes in the extractive industries, including insolvency proceedings, contract pricing and royalty disputes.”

 

MEXICO

Béla Kálloi

Rivera Gaxiola, Carrasco y Kálloi

“Mexico has been affected by the global economic crisis of recent years, which has increased the amount of disputes arising from contractual breaches among private sector companies and other entities related to the public sector. This is particularly the case for the financial services and energy sectors. Mexico faces major challenges, such as achieving confidence in judicial courts settling disputes exhaustively and efficiently. Another major challenge is enforcing and executing judgments and orders without the burden of bureaucracy and undue delays.”

 

ARGENTINA

Ricardo A. Ostrower

Marval, O’Farrell & Mairal

“The new administration which has taken office in Argentina has implemented a strong agenda aimed at attracting foreign business and investments. The strategy to foster an investment-friendly climate includes comprehensive adjustments in several key sectors of the economy, such as the energy, oil & gas, mining, pharmaceutical and infrastructure sectors. Moreover, Federal Congress is currently debating a new legal framework for public-private partnerships (PPPs) which, if approved, may have a substantial impact on foreign investments in our country. In this context, we expect commercial disputes across Argentina to become more complex and international due to the increasing number of foreign companies active in our region. Most of these disputes will be settled through arbitration.”

 

CAYMAN ISLANDS

Kirsten Houghton

Campbells

“We are seeing an increased focus on the conduct of directors and service providers within the funds industry. This heightened scrutiny comes not only from investors and creditors, but also from regulators, possibly as a result of the continuing post-mortem following the financial crisis and the ongoing debate regarding the implementation of Common Reporting Standards, to encourage and codify cross-border transparency and cooperation. Directors of funds, in particular, should familiarise themselves with these developments and take appropriate steps to ensure that they comply with their fiduciary and management obligations in order to ensure compliance.”

 

UNITED KINGDOM

Ashkhan Candey

CANDEY

“Companies and individuals need clarity when it comes to legal fees and budgets. Lawyers who offer fixed fees, value based billing or success based billing will find themselves in a better position than those who ask for blank cheques each month. English lawyers are now able to offer Damages Based Agreements (DBAs) whereby fees are calculated as a percentage of recoveries on a contingent, or ‘no win – no fee’, basis. Those lawyers who are willing to share risk and reward in this fashion will find themselves far better placed to win work from new clients.”

 

FRANCE

Elie Kleiman

Freshfields Bruckhaus Deringer LLP

“Continental Europe is seeing a growing hostility toward

arbitration which is being increasingly perceived as costly, lacking in transparency and independence and biased in favour of large corporations. Fair or not, this reaction is clearly inspired by a sense of insecurity that is itself the product of economic recessions, climate change, mass immigration, Brexit and the threat of terrorism. In France, with the next presidential elections in May 2017, it is expected that this insecurity will prevail at least until the middle of next year and possibly beyond.”

 

SPAIN

Manuel Gordillo

Deloitte Legal

“One of the main market challenges is enhancing the use of new technologies in managing disputes. Greater technology use will generate better efficiency and important cost savings. Spanish courts have implemented an IT system which has been designed to eliminate paper. Although this scheme is still in a preliminary stage, it has been a very important step. Likewise, law firms are starting to use new technologies to create important cost savings, namely by reducing the time devoted to some legal tasks related to dispute resolution. Due to the workload of our courts, ADR should be a genuine alternative for any company, particularly in terms of the accuracy of it as a solution and the potential cost and time efficiencies it generates. Accordingly, every player in the legal field should clearly advise parties about the main advantages of ADR, but they must also be mindful that not every dispute can be resolved through ADR.”

 

GERMANY

Dr Anke Meier

Noerr

“While there are currently no huge changes in the overall litigation and ADR landscape in Germany, there are several trends we can see which are impacting on how companies solve their disputes. Firstly, companies are considering litigation funding or a grouping of claims more frequently than in the past, which changes litigation strategies and presumably increases the aggressiveness of the litigation. Secondly, companies are still moving into arbitration to resolve international disputes. The leading German arbitration institution, the German Institution of Arbitration (DIS), is currently revising its arbitration rules with the new rules set to be published in 2017. There also appears to be slightly more use of mediation, either upon the parties’ own initiative or upon the suggestion of the court.”

 

SWITZERLAND

Urs Feller

Prager Dreifuss AG

“Changing consumer trends have influenced some aspects of commercial disputes. We are seeing a rise in commercial rent litigation where tenants are litigating to remain in traditional premises or are at odds with landlords in new malls for reasons such as inappropriate disclosures about their clientele. We are also still seeing bankruptcy related litigation as a consequence of some international insolvencies that have affected Swiss subsidiaries or companies. In banking, the peak of litigation in connection with data transfer to the US Department of Justice seems to have passed, but general banking and insurance litigation is still prevalent.”

 

ROMANIA

Cornel Popa

Tuca Zbârcea & Asociatii

“One major challenge is the recent tendency of criminal enforcement authorities to apply provisions of criminal law to commercial transactions. This may result in several pernicious effects on commercial activity, such as the uncertainty of legal title over assets in a transaction, or re-qualifying otherwise ordinary commercial operations as criminal offences, such as, for example, in numerous instances where we see a wide-ranging interpretation of the legal provisions regarding money laundering, which may invalidate ordinary transactions.”

 

TURKEY

Orçun Çetinkaya

Moroglu Arseven

“Turkey has struggled to achieve economic stability of late, primarily due to the state of emergency has been in place since July 2016’s failed coup attempt. Regional political fragility has also created a significant challenge. The Turkish lira has continued to weaken against both the US dollar and the euro, and, as a result, Turkish corporations have faced payment difficulties. Some firms have been forced to downsize. Accordingly, the main recurring themes for commercial disputes in Turkey have been the dissipation of assets, as well as the suspension of bankruptcy and re-employment lawsuits. Enforcing injunctions is also becoming more difficult.”

 

HONG KONG

Camille Jojo

Norton Rose Fulbright

“We have been seen delays in High Court proceedings due to pressure on court resources, which has resulted in difficulties in obtaining hearing dates. Hong Kong is also one of the few countries in the world that upholds the doctrines of champerty and maintenance that make it illegal for a person with no interest in a lawsuit to finance it with a view to sharing the recoveries if the lawsuit is successful. Some argue that these doctrines affect an innocent party’s access to justice if they cannot afford the expense of conducting legal proceedings. However, the Law Reform Commission has recently released a paper recommending that the law be amended to expressly allow third-party funding for arbitrations in Hong Kong, which will enhance Hong Kong’s competitive position as an international arbitration centre.”

 

JAPAN

Taku Nomiya

Hibiya Park Law Offices

“After the financial crisis in 2008, many companies in Japan incurred huge losses in connection with their purchased currency swaps. This was due to the sharp appreciation of the yen and these losses were also linked to many claims for damages against financial institutions which sold the swaps on the grounds of violating the principles of suitability and accountability. We have also seen many lawsuits between system vendors and users in relation to disputes arising from system development agreements.”


CONTRIBUTORS

Campbells

CANDEY

Deloitte Legal

Freeborn & Peters

Freshfields Bruckhaus Deringer LLP

Hibiya Park Law Offices

Marval, O’Farrell & Mairal

McCarthy Tétrault

Moroglu Arseven

Noerr

Norton Rose Fulbright

Prager Dreifuss AG

Rivera Gaxiola, Carrasco y Kálloi

Tuca Zbârcea & Asociatii


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