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ANNUAL REVIEW

Litigation & Alternative Dispute Resolution 2018

November 2018  |  LITIGATION & DISPUTE RESOLUTION

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Alternative dispute resolution (ADR) methods, most notably arbitration and mediation, have risen in popularity in recent years. The enforceability and neutrality of arbitration, for example, are often cited as key advantages over litigation. Furthermore, the potential cost and time savings offered by early mediation – assuming the parties are open to negotiation and compromise – have resulted in its increased adoption across jurisdictions.

UNITED STATES

Charles B. Rosenberg

King & Spalding LLP

“One of the major market challenges in the US is choosing the right arbitral institution. Given the proliferation of alternative dispute resolution (ADR) and the role of arbitral institutions in recent years, US companies often encounter difficulties with selecting an appropriate forum from among the alphabet soup of acronyms. Prominent options in the US include the Judicial Arbitration and Mediation Services (JAMS), the International Institute for Conflict Prevention and Resolution (CPR) and the American Arbitration Association (AAA) and its international arm, the International Centre for Dispute Resolution (ICDR).”

 

CANADA

Lauren Tomasich

Osler, Hoskin & Harcourt LLP

“The market challenges at the centre of commercial disputes in Canada are predominantly related to the pressure on in-house legal departments to do more with less. With company budgets getting smaller, companies are being forced to come up with different legal and budgetary solutions that effectively handle disputes, while continuing to meet business objectives and maintain acceptable risk. Some of these strategies include the disaggregation of legal services to push different pieces of a dispute to the lowest cost provider, the proliferation of alternative fee arrangements to increase budgetary certainty, and taking on more work in-house to reduce expenditure on legal fees.”

 

MEXICO

Marco Tulio Venegas

Von Wobeser y Sierra

“In the Mexican market, the main challenge existing in commercial disputes is to overcome the cultural inertia that has plagued the way in which conflicts are seen and perceived by companies, the government and the judiciary. Commercial disputes are seen, in general, as a long, costly and unpredictable malaise. In the past few years, a new culture to expedite the resolution of disputes, putting aside the extremely formal procedural challenges and promoting alternative dispute resolution (ADR), has been slowly implemented. However, judges and attorneys are still in the process of adopting and accepting this new paradigm.”

 

ARGENTINA

Ricardo A. Ostrower

Marval O’Farrell & Mairal

“Arbitration is considered one of the main dispute resolution methods in Argentina. It is increasingly common for clients to ask for arbitration clauses in their contracts, especially when dealing with complex and cross-border transactions. The foremost challenge will be to support this positive attitude and reaffirm the region as arbitration-friendly. To achieve this, a two-way contribution will be needed: legislators must modernise the legal framework for arbitration, while judges must interpret that legal framework in a welcoming manner and reduce judicial interference. Regarding arbitration legislation, Argentina has taken big steps.”

 

UNITED KINGDOM

Ashkhan Candey

CANDEY

“Access to litigation funding and liability for adverse costs – meaning payment of your opponent’s costs should you lose – remain one of the biggest market challenges to companies or individuals without access to capital. The ability of lawyers to charge fees on a percentage basis is a helpful development in this regard, but questions as to the legislative framework that governs contingency agreements and how the English ‘damages based regulations’ work mean that many lawyers are weary of entering into them. Having a sufficient number of judges is another challenge.”

 

FRANCE

Serge Gravel

FLV & Associés

“A major challenge in today’s commercial disputes market comes from the recently enacted rules on compensation of alleged victims of anticompetitive practices, also known as ‘private enforcement of cartel damages claims’. The implementation of European Union Directive 2014/104/EU, through French Order No. 2017-303 of 9 March 2017, and French Decree No. 2017-305 of 10 March 2017, offers a comprehensive framework for the compensation of private damages generated by anticompetitive practices, which supplements the public rules and mechanisms, which the French administration is empowered to sanction.”

 

SWITZERLAND

Urs Weber-Stecher

Wenger & Vieli Ltd.

“As one of the original venues for arbitration, Swiss institutions have been offering institutional arbitration for commercial disputes for more than 100 years – for instance, Zurich’s Chamber of Commerce. One of the major challenges today is the increasingly competitive environment of international dispute settlement. There is a rise of Asian arbitration centres, but African sites such as Johannesburg, Kigali and Lagos are also expected to become competing seats within the next decade. Thus, even traditional places like Switzerland face an ongoing challenge to remain one step ahead.”

 

NETHERLANDS

Timo Jansen

Lexence

“The Dutch administration of justice has struggled with the digitalisation of court proceedings. This year, an ambitious programme, Kwaliteit En Innovatie (Quality and Innovation), was aborted due to managerial problems following a €220m investment in information and communication technologies (ICT). On the other hand, the Dutch administration of justice has begun to accommodate international business concerns with the establishment of the Netherlands Commercial Court (NCC) which is expected to open in the first half of 2019. The NCC will offer a swift resolution of international commercial disputes by specialised judges, in English, for a slightly higher administration fee.”

 

SWEDEN

Krister Azelius

Advokatfirman Vinge KB

“Swedish companies consider disputes as a normal part of their business and it is a business standard to include a dispute resolution clause in agreements and contracts. This trend is generally for all industries and sectors. However, companies are still conservative toward mediation. A successful mediation is often the quickest and cheapest alternative, and parties should be more open toward its use. We have seen an increase in the amount of complex cases against auditors, board members, lawyers and other consultants in Sweden where the claimant alleges that the consultant has been reckless in giving advice.”

 

GERMANY

Sarah Lindemann Büthe

Wach + Meckes LLP

“As a glance at the German news makes clear, the multi-faceted fallout from diesel-gate is centre stage. On the investor side, multi-billion-euro securities suits allege that VW failed to disclose market-material information in a timely manner. These suits are bundled in so-called KapMuG proceedings, a German form of class action, and are being heard this fall. On the consumer side, diesel-gate has sparked a new consumer ‘class action’ law that will go into effect in November 2018 and allow diesel car owners, via an umbrella organisation, to bring a group action. Executives alleged to have propagated the diesel fraud and cover-up have been detained.”

 

ROMANIA

Florian Nitu

Popovici Nitu Stoica & Asociatii

“Length of proceedings, limited efficiency of injunctive relief tools, enforcement and execution hurdles remain major preoccupations. Nevertheless, the functioning of the judicial system in Romania has improved notably in recent years. Structurally, and more generally, state courts and their two-level, sometimes three-level, review procedures are ill-equipped to administer justice in commercial disputes. More economic and time-efficient dispute resolution platforms are needed to serve businesses in their disputes and arbitration – particularly sole-arbitrator, fast track or online processes look more suitable for this purpose.”

 

AUSTRIA

Désirée Prantl

Freshfields Bruckhaus Deringer

“The Vienna International Arbitral Centre (VIAC) is the premier arbitration institute in the Central and Eastern European (CEE) region. Nevertheless, as with any other arbitration institution, the VIAC faces the challenge of having to secure arbitration’s main selling points – the time and cost-efficient conduct of arbitral proceedings. To stay competitive, the VIAC adopted the new ‘Vienna Rules and Vienna Mediation Rules 2018’, which came into force on 1 January 2018. A few significant changes have been made via the rules, such as the inclusion of an explicit right of the tribunal to fix security for costs.”

                                                                                                                                        

CHINA

Tiana Zhang

Kirkland & Ellis International LLP

“Lack of predictability, limited discovery mechanisms and ineffective enforcement are the most daunting challenges for companies handling commercial disputes in China. Lack of predictability is driven by a set of complex and convoluted factors, including the inherent ambiguous and fast-evolving nature of many Chinese laws, inconsistent interpretation across different local courts, limited judicial experiences in a number of novel areas and extraneous factors, including local protectionism, public sentiment and other political considerations.”

 

AUSTRALIA

Ben Luscombe

Clifford Chance LLP

“One of the most significant market challenges at the centre of commercial disputes in Australia is how best to enhance and improve the process of dispute resolution to ensure that parties have access to an efficient, cost effective and timely mechanism for the resolution of their disputes, especially in the context of cross-border commercial disputes. International arbitration is an increasingly popular method of dispute resolution with foreign parties, principally because of the New York Convention enforcement mechanism. For law firms which are less familiar with international arbitration, this trend poses a real challenge.”

 

ISRAEL

Ram Jeanne

Amar Reiter Jeanne Shochatovitch & Co.

“The significant number of class actions, derivative claims and shareholder litigations, in addition to specialised courts exclusively dealing with such claims, contributes to a rapidly changing environment, and to frequent updates of relevant corporate and commercial case law. Practitioners must make sure that they are always up to date and are capable of coping with new and changing legal challenges. Consequently, today, seasoned corporate and commercial litigators are becoming more specialised in this area, and sometimes even focus on specific types of shareholder or class action litigation.”

 

UNITED ARAB EMIRATES

Areen Jayousi

Horizons & Co Law Firm

“Perhaps the most pressing market challenge facing commercial litigants at the moment is the choice parties have in terms of a forum for their commercial disputes to be heard. In the UAE, one is able to choose between common law and civil law in that litigants are able to apply to the Arabic-based onshore courts as well as offshore courts which are based exclusively in English common law. This can be an issue on occasion as these competing jurisdictions can come into conflict, and sometimes issue contradictory judgments and create confusion for litigants.”


CONTRIBUTORS

Advokatfirman Vinge KB

Amar Reiter Jeanne Shochatovitch & Co.

CANDEY

Clifford Chance LLP

FLV & Associés

Freshfields Bruckhaus Deringer

Horizons & Co Law Firm

King & Spalding LLP

Kirkland & Ellis International LLP

Lexence

Marval O’Farrell & Mairal

Osler, Hoskin & Harcourt LLP

Popovici Nitu Stoica & Asociatii

Von Wobeser y Sierra

Wach + Meckes LLP

Wenger & Vieli Ltd.


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