Top five strategy considerations for managing cross-border litigation

The increasingly rapid development, adoption, and proliferation of technology has put in motion a strong trend toward globalisation. As companies expand sales into new markets, they may find themselves facing litigation in more than one jurisdiction. This article provides five strategy considerations when facing cross-border litigation and explores potential pitfalls to avoid. Cross-border litigation can be incredibly complex, but this article may help you to identify effective strategies to manage litigation in the global courtroom.

Create a cohesive team

One of the initial strategy considerations in managing cross-border litigation is creating a cohesive team that is forward thinking and anticipates the ways that issues in one jurisdiction could impact litigation pending in other jurisdictions. In large multinational companies there are often multiple entities, and determining whether you will have one group of counsel representing the entities or separate counsel for the parent versus the subsidiaries is an important early consideration.

A multi-disciplinary team is critical in defending against cross-border litigation. Creating a core lead team that includes in-house counsel of the parent company, outside counsel, and local counsel can best create cohesion across multiple entities, business units, and products. This team approach may be best positioned to understand the company’s needs and anticipate risk and red flags in the litigation. Consider inviting people from the business to be a part of the team, so that the documents and information provided to the legal team are coming from the best and most knowledgeable sources.

Co-ordinate across jurisdictions

Consistent reporting to counterparts in other jurisdictions allows all team members to function more cohesively and can prevent the development of disparate theories of the case. Once involved in litigation in a particular jurisdiction, local counsel must be retained. The role of the local attorney will be primarily to provide the legal information to prepare the case. Local counsel will be more familiar with procedure, judges, and court staff; however, the core lead team should be involved with the work in all jurisdictions for efficiency and uniformity of defence. Knowledge of the jurisdiction-specific rules, such as the blocking statutes and data privacy regulations (eg the European Union’s General Data Protection Regulation), is vital to mitigating risk in corporations with potential exposure to cross-border litigation. Coordination between local regulatory counsel, in-house counsel, and the core lead team related to these discovery issues can prevent future problems should cross-border litigation arise.

In global litigation, small issues have the potential to become amplified. If there is an organisational or communications issue, it becomes rapidly apparent. To avoid this, in-house counsel should encourage regular communication. There should be standing teleconferences with lead counsel, local counsel, and in-house counsel. In-house counsel should also consider each counsel’s role on the team and communicate those expectations clearly in order to avoid duplication of efforts and unnecessary confusion. Having a unified defence strategy in place before any issues arise may be effective in reducing potential exposure to liability and serves to drive down time and expenses involved.

Analyse preservation protocols

Counsel should strategically analyse preservation protocols with an eye toward preserving data, documents, and things in line with the most restrictive jurisdiction in which they may face litigation. Many international companies are based in jurisdictions that impose limited discovery obligations; however, companies that operate in the US may be subject to litigation in an American court. Generally, the scope of discovery is broader in common law countries such as Australia, Canada, Hong Kong, Singapore, the UK, and the US. For example, most member states of the European Economic Area, and the majority of other countries around the world, use civil law regimes that do not require American-style discovery. Most of these civil law jurisdictions do not have an equivalent to the preservation notice that is often issued in anticipation of litigation in the US. Therefore, the importance of a preservation notice must be effectively communicated to parent companies in civil law systems operating in the US in order to avoid subsequent spoliation of evidence allegations. A strategic analysis of the preservation protocols and effective co-ordination and communication can aid organisations in avoiding exposure and potentially substantial liability.

In the US, there is an increasing trend toward seeking discovery into a multinational defendant’s conduct in foreign jurisdictions. This is especially true in cases where a multinational defendant has interactions with foreign regulatory bodies. The expense of gathering, reviewing, translating, and producing a vast number of documents regarding foreign regulatory interactions can even surpass the amount of money at stake in a litigation. Nevertheless, when subject to a jurisdiction that provides a broad scope of discovery, a litigant must produce such information, absent a protective order. To successfully oppose such broad and burdensome discovery, a multinational defendant must be prepared to demonstrate, with supporting evidence, the degree of burden imposed by such discovery requests. This requires proactive efforts to equip counsel with the factual tools needed to support such arguments. A holistic approach to managing a diverse array of teams involved in defending cross-border litigation can minimise costs expended in discovery disputes and should start with a thorough analysis of existing preservation protocols in all jurisdictions.

Determine the appropriate party

Plaintiffs in litigation often do not have the correct information on corporate structures. Frequently a foreign entity will be named improperly when it is really a subsidiary located in another jurisdiction that is at issue in the litigation or vice versa. Counsel should be on the lookout to immediately determine if the proper party has been named and try to strategically work out the issue at the beginning of a case. The improper party can be dismissed and the proper party added if strategically negotiated. Misnamed parties can shape cross-border litigation in unintended ways. The factual statements made about the company and the roles of witnesses and where facts and documents are located will be available to other litigants, so the company will often be bound by these prior statements. It is important to discuss whether counsel should fight to keep the foreign entity out of the case or whether they should ask for a certain party to be included.

Plaintiffs’counsel will be evaluating who at the company has the relevant documents that are central to the themes that will be plaintiffs’focus in the litigation. Companies should expect that savvy plaintiffs’counsel are doing social media research on potential company witnesses and background investigations on who actually has control and responsibility for company decisions. Often, these witnesses will be subject to depositions and the documents will be requested through formal discovery, so pre-emptive identification of the appropriate entity, key witnesses, and the locations of documents will help form a unified defence strategy.

Prevent future litigation

Perhaps most important, do not take for granted that counsel has an incredibly important role between cross-border litigation – counselling the client. After a major cross-border litigation concludes, counsel should continue to communicate openly within the core lead team and prepare a ‘lessons learned’presentation for the business. To avoid similar issues in the future, one should put into place best practices and protocols developed from real-world experience as well as train employees if needed or revisit and strengthen certain areas. Development and implementation of a cross-border litigation strategy is dynamic, and a company should take lessons from past litigation and implement improved business practices and protocols to potentially minimise future liabilities.

This article is presented for informational purposes only and it is not intended to be construed or used as general legal advice nor as a solicitation of any type. Greenberg Traurig, LLP has more than 2,000 attorneys in 39 offices in the US, Latin America, Europe, Asia, and the Middle East. GT’s litigation practice handles highly complex litigation in challenging jurisdictions around the world.