Taking the gloves off

The penultimate session of the 2018 Commercial Litigation Summit drew a large audience to hear the views of the most important players in a major dispute – GCs and senior in-house counsel. This debate featured a panel of two private practice litigators – Jenner & Block’s Jason Yardley and Simon Bushell from Signature Litigation, and two senior in-house counsel – Matthew Hibbert of Sky and Tarun Tawakley of Deliveroo. In the middle was a barrister, moderating – Richard Lissack QC of Fountain Court – and a PR veteran, Tim Maltin.

 

The private practitioners began by discussing what is important to get right from the get-go in large, multijurisdictional disputes. Bushell said the key issue at the outset is to work out where the centre of gravity is and identify where the key steps in the litigation are likely to take place and where the satellite issues are going to be litigated or arbitrated. This usually involves engagement with a lot of other lawyers in different jurisdictions.

‘I have always been alert to the tendency for each lawyer in each jurisdiction to see things very much from their own perspective. That situation needs a good GC and a good external lawyer to sit at the top of that process and to distil the various arguments because it sometimes comes to a competition between the various venues and their lawyers. You need to cut through all that.’

Yardley agreed, saying it is very important for the GC in a multijurisdictional case to identify the person who is going to be their eyes and ears with the other legal teams and take on that co-ordinating role. ‘The key issue is keeping the local teams on a tight enough leash that none of them can go off on a frolic of their own and do things that seem natural to them but may not fit in the bigger picture.’

That point was picked up on by Hibbert, who spoke about issues such as a patent dispute where a party could come after Sky in the UK, Italy and Germany: ‘The processes and the systems may be very different, as are the rules on disclosure and privilege, but we have to make sure that the teams are joined up and the role of the in-house litigator is often that of manager of the process.’

He added that it was also true for UK-centric disputes, citing himself being pulled into the Leveson Inquiry shortly after joining Sky. ‘That was a big co-ordination exercise because of a broad-ranging request for evidence about Sky News. There was a tagalong potential criminal prosecution of journalists at the end of that and what we said to Lord Justice Leveson in that public inquiry had to be done with an eye on the position of journalists under investigation by the CPS at the time. There was a real need to keep control of internal clients who may have an interest in saying one thing, but which may be deleterious to others involved in the organisation who have separate interests.’

Tawakley spoke of his expectations of external counsel when a huge dispute hits, drawing on his recent experience with various ‘gig economy’ actions involving the employment status of Deliveroo riders.

‘I put a lot of pressure on my external counsel to give me clear guidelines in terms of how important an issue is and how much I can drop it and what I can play with. Then it is about playing that internal role of being the decision maker on what we deploy and where to be most effective.’

He also noted the importance of working with PR in these cases, which can be front-page news. ‘Where we had claimants coming against us that were seeking to use the media as a tool, it was very important that we were putting forward our side of the story and why we operate our model in the way we did. When we were successful, we were able to point to that as to why we had fought this.’

Maltin noted that increasingly in major cases getting PR involved is not a choice. ‘Often, the other side will already have PR involved or there may be a PR war going on with vested interests that your litigation or potential litigation is stepping into.’

Back to the importance of co-ordinating teams, consistency of message is vital because, as Maltin said, ‘nothing will catch you out more quickly than saying one thing on day one and another thing on day two’. Speed is also key for PR. ‘You cannot be waiting for your chief exec to wake up in the States to give you permission, you have to have the trust of that team. That means getting involved early to build trust and do your reading in, even on the PR side, so you really understand the legal implications of what you are going to be saying.’

Yardley said there are not many clients that are litigating so regularly that they know what they should be doing in all circumstances, so how you put your team together is an area where external counsel can provide guidance. Not only in putting together a team dealing with the dispute but also thinking about those who may be in a sensitive position, those who may need HR support and, if there are some who may be in the process of being exited, how to look after them and make sure that they are kept onside to give any evidence needed in future.

‘Looking at it from the outside, you want to see all of those things being done. You want to know exactly who you are dealing with on the inside so that you have your privilege in place, and you want to see that the right group of people are being collected together at an early stage that will help throughout the case.’

Lissack asked the in-house specialists how they chose external counsel and what they considered as value for money. Hibbert said it depends on the nature of the dispute, citing a dispute a few years ago against the Church of Scientology, which required a different type of external counsel to what might be expected in a supply chain dispute.

‘I will look around and think, “Who has the skillset to do the job and, critically, the commercial and empathetic head to do the job?” Litigation is about process management and people management. Litigation is not about who can shout the loudest or be the most aggressive. It is about intelligent conflict resolution.’

Emotional intelligence is a key criterion. Tawakley added that it is vital to use external lawyers that understand the business. The last thing a GC wants in a crisis scenario is to have to spend time repeating key messages and getting people to understand the business.

The importance of good communication at the outset also extends to cost planning. Yardley noted that while generally in large multi-jurisdictional cases, costs are not the be-all and end-all, it is still essential to add value: ‘If you are not making the GC’s job easier then you are not doing your job.’

Tawakley said this point was particularly important, especially when suggesting using other firms, for example, in a jurisdiction where there is a skills gap. It is far better to tell the client there is a need for the extra resource rather than charge less and do a bad job, leaving the client with dissatisfied internal clients. ‘Nine times out of ten it is more about value for money than actual cost, and where that is the case it is far better to have the right people on the case and the right support.

‘No company wants to spend money on litigation, but there is a recognition in organisations, particularly where the litigation is big, that an investment is needed there to protect the company. There is not a problem in law firms saying to me at the outset, “It is going to cost you £1m to have this dispute”. There is a problem if, at the end of month two of the job, I am presented with a bill for £1.5m and that is the first I have heard of it.’

In terms of cost management, the use of litigation funding – touched on earlier in the day at the summit – was a key discussion point. Reaction from the in-house counsel on the panel was lukewarm. Hibbert felt that while the ability to not have the litigation cost come off the EBITDA was a great advantage of the model, it would need a sizeable dispute for it to work. ‘A lot of what I deal with at Sky is significant litigation, but not necessarily running into the multi-million pounds worth of costs. I am not ruling out litigation funding in the future, but as of yet we have not found a case that I would be interested in using it for.’

However, as Bushell pointed out, litigation funding is not just about deciding whether you want an existing dispute to be funded. Sometimes the funders and the lawyers they work with can bring cases to clients that they do not realise they have. ‘I am not just talking about class action claimants; also large corporations that do not necessarily appreciate that they have claims. The problem is that budgets do not extend to allow a creative GC to identify claims and then go to business and say: “I would like to bring these claims and spend the amount of money required to pursue it.” If a funder and a lawyer that they are partnered with identifies those claims and comes to the client with a package, then that becomes a different proposition.’