Managing Complex Litigation: A Personal Experience (Part 1)

Introduction

An Analysis of Complex Litigation EEvery company faces litigation, at some point in time. This is an occupational hazard, that cannot be avoided. In many cases, these litigations are in relation to fairly standard lawsuits regarding real estate, debt recovery or contractual disputes. Almost any experienced corporate Lawyer is capable of resolving such matters, with the best possible outcome. However, this is not the case with complex litigation.

Litigation: Its Meaning

Litigation is the process of resolving disputes, by filing or answering a complaint through the public court system. It requires the taking of arguments between people or groups (including companies), in a court of law. It is also the process by which Counsel to parties in lawsuits intend to integrate their actions with anticipated events, reactions, arguments and defence, to achieve the overarching goal of winning the litigation. It is true that any lawsuit may be complicated, but complex litigation is the most complicated litigation that companies face.

The US Federal Judicial Centre’s Manual for Complex Litigation defines complex litigation as including: “one or more related cases which present unusual problems and…require extraordinary treatment, including but not limited to the cases designated as ‘protracted’ and ‘big’”. Complex litigation, refers to a specific type of large civil case that companies face. It typically involves large civil cases involving multiple parties, multiple jurisdictions, large amounts of money, lengthy trials, complex legal issues, and multi-jurisdictional and complex choice of law issues.

Expectedly, these types of lawsuits draw serious media scrutiny, and they usually accrue to substantial costs on a company, irrespective of whether or not they win such cases.

These complex litigations encompass several kinds of lawsuits, including class action lawsuits, international arbitration, contractual disputes, etc. Even the non-performance of a simple international sale of goods agreement, can dovetail into complex legal battles. As a result, these complex litigations usually require sophisticated litigators and expertise.

As evidenced by the Federal Judicial Centre’s Manual for Complex Litigation, an increasingly indispensable text for the sophisticated litigator, complex litigation has become its own discipline. Lawyers who hope meaningfully to understand and successfully to practice in sophisticated litigation, have to understand not only how this system operates, how it builds upon and modifies basic procedural doctrine; and how it impacts public regulations through private litigation.

The Role of the Judiciary in Complex Litigation

Judicial supervision is most needed and productive, early in complex litigation. To this effect, Judges should conduct pre-trial conference as soon as practicable (usually within 30 to 60 days of instituting proceedings). It is therefore, imperative for the assigned Judge to be notified of a potentially complex case as soon as possible. In certain situations, the demands of complex litigation is so enormous that the assigned Judge is relieved of his case docket for a certain time, or provided with assistance from other Judges or Judicial staff. Virtually all jurisdictions in Nigeria, now have Civil Procedure Rules incorporating pre-trial sessions.

Complex litigation often constitutes of two or more separate, but related cases. It is imperative that all such cases should be assigned to a single Judge, for administrative ease. Once a complex or perceived complex case is assigned to a Judge, such a Judge should immediately review the pleadings and other processes in the case, the parties and their Counsel, and the interests therein, so as to search for possible conflicts of interest that would warrant his recusal. Where no conflict of interests arises, the Judge should then attempt to ascertain, whether there are related cases before his court or other courts. This is for administrative ease. and to prevent duplicity of cases.
In the United States of America, the Judges’ role in complex litigation management is crucial. A Judge’s effective judicial management usually has the following characteristics:
– Active: The Judge predicts or attempts to anticipate problems before they arise, rather than dealing with them as they arise.

– Substantive: The Judge is involved, but not limited, to procedural matters. Here, the Judge familiarises himself with the substantive issues of the case, in order to deliver informed rulings on such issues.

– Timely: The Judge gives prompt rulings and judgements, particularly those which might significantly affect further proceedings.

– Continuing: The Judge regularly monitors the progress of litigation, to ensure that litigation schedules are being adhered to.

– Firm, but Fair: Time limits, controls and requirements are not arbitrarily imposed on parties, without due consideration to the circumstances of the case and views of Counsel.

– Carefully prepared: Careful preparation sets out the proper tone, to facilitate the Judge’s effectiveness and credibility with Counsel.

The Role of Counsel in Complex Litigation

The duties and responsibilities of Counsel in the management of complex litigation, do not lessen in the face of judicial intervention. Contrarily, Counsel assume more responsibility due to their roles as advocates and officers of the court. Because of the nature of complex litigation, Judges usually rely heavily on the assistance of Counsel, upon which their case management is dependent. Other reasons also require the role of Counsel, such as the importance of interests at stake; length and complexity of proceedings; difficulty of communication and establishing working relationships with numerous Lawyers; challenges of appearing in unfamiliar courts with unfamiliar jurisdiction; extensive travel usually required; amount of money and costs accruable etc.

Complex litigation often involves numerous parties with common or similar interests, but separate counsel. Traditional procedures in which all papers and documents are served on all Lawyers, and each Lawyer files motions, presents arguments, and conducts witness examinations, may result in waste of time and money, in confusion and indirection, and in unnecessary burden on the court. Special procedures for coordination of counsel are therefore needed, and should be instituted early in the litigation to avoid unnecessary costs and duplicative activity. In many cases, the Lawyers coordinate their activities to avoid duplicity of cases, without even the assistance of the court.

Similar to the judicial role, Lawyers should be quick and alert to the existence of present or potential conflicts of interest, particularly in complex litigations where there are multiple parties and interests. An early conflict check must be made, before accepting representation. This check should not be narrowed down to persons and companies formally acting as parties in the suits, but should be broadened to include affiliate persons and companies.

Complex Commercial Litigation

The Nigerian legal system generally uses commercial litigation, to deal with high-value and complex disputes. In fact, commercial litigation is the most common dispute resolution process, for resolving such disputes in Nigeria. Quite a number of complex and high-value disputes, are nowadays better resolved through commercial arbitration, as high-value contracts tend to include arbitration clauses, which subject disputes to an arbitral tribunal. Commercial arbitration, which is part of Alternative Dispute Resolution (ADR), is fast becoming the preferred method of resolving such disputes in Nigeria.

Commercial litigation disputes tend to be domestic in nature, that is, between Nigerian parties. However, participation of international parties also occurs, but mostly in instances where there is a Nigerian connecting factor such as the place of performance, the location of the subject asset, the law governing or the seat of the arbitration agreement (arbitral cases might be referred to courts to adjudicate on some issues), or the domicile of one of the parties. Purely international disputes with no Nigerian connecting factor, are extremely rare in Nigeria.

Commercial litigation is governed by the Constitution, Statutes, Rules of Court, judicial decisions on litigation procedure as found in the procedural rules of the different levels of court, Statutes on litigation procedure and Practice Directions. Nigerian commercial litigation develops from English common law. This means that the law develops through the Judges, who play a non-inquisitorial role in adjudication, while the parties seek the outcome most favourable to their position. Here, the Judges constantly develop the law through the ratio decidendi in their rulings and judgements, which form the reasoning behind their positions.

Factors in Commercial Litigation

Before bringing a claim through commercial litigation, recourse must be had to the following factors:

– the limitation period for commencing the action;
– the appropriate court with jurisdiction to entertain the claim;
– the issuance of pre-action notices where government agencies and departments are involved;
– where companies are involved, the correct names of the companies as registered at the Corporate Affairs Commission;
– whether any alternative dispute resolution (ADR) mechanisms can be used, or whether parties have agreed to submit to any ADR mechanism;
– whether all available remedies have been exhausted before embarking on litigation;
– the cost of litigation;
– the possibility, practicalities and potential difficulties of enforcing the judgement; and
– the civil procedure rules of the relevant court.

Jurisdiction of Courts in Commercial Litigation

Jurisdiction of courts to try commercial litigation is established by the Constitution, and several judicial decisions have also been held to that effect. Subject-matter rules can be found in Chapter VII of the Constitution, which prescribes the jurisdiction of the superior courts of record. The civil procedure rules of various courts, determine how the court would exercise jurisdiction over foreign parties.

Jurisdictional challenges are available and are usually grounded on the court’s lack of subject-matter jurisdiction or jurisdiction over the parties, or both. The principle of abuse of court process is available to prevent defenders from duplicating actions, and instituting an overlapping process in another jurisdiction in Nigeria. Generally speaking, there is no protection available to stop a Defendant from starting an overlapping process in a foreign jurisdiction preferred by it. However, where a court decision or judgement prevents an individual from starting or continuing an overlapping process and such individual continues, he or she would be liable for contempt of court, which could be both criminal and civil in nature.

Res Judicata

As is native to the Nigerian legal system, the principle of res judicata applies to complex commercial litigation. It is the principle that prohibits parties from pursuing, or reinstituting a matter that has already been adjudicated upon by a court of competent jurisdiction. (To be continued next week).

Serious and Trivial
“If you want to achieve something, you have to forget the boundaries that people create. No one knows your capabilities, more than you.” – Anonymous

THOUGHT FOR THE WEEK
“Litigation is the pursuit of practical ends, not a game of chess.” (Felix Frankfurter)