Barbara Sadler: Commercial Litigation

General commercial litigation involves virtually every type of dispute that can arise in the business context, including breach of contract cases, partnership/joint venture disputes, class actions, business torts, civil RICO claims, breach of fiduciary duty allegations, and shareholder issues. Successful commercial litigators need to be able to assess the merits of a dispute and scale either a prosecution or defense that fits the legal and business needs of the client. Efficiency, creativity, and sound judgment are critical for intelligently positioning these disputes, whether they are “bet-the-company” cases or more discrete matters. In addition, while all cases must be litigated with an eye toward ultimately trying them, seasoned commercial litigators understand that at all time they must strive to achieve the best possible result at a reasonable cost.

Litigation increasingly occurs in various venues, from state and federal courts to private arbitrations and administrative hearings. Proceedings can involve business-to-business disputes or any number of government agencies. Understanding the motivations and outlook of each of the litigation participants is important for determining weak points to exploit and strong points that will persuade the audience in question. During the past decade, commercial litigators have seen a dramatic uptick in multidistrict and inter-disciplinary litigation, making the stakes higher, the cases more complex, the parties more numerous and the discovery more complicated and unwieldy. Firms that are able to develop and implement a creative legal approach to each individual problem, efficiently focus on the key legal and factual issues, and master and manage the various aspects of these complex matters will be the busiest in the years to come.

In the current challenging economic climate, commercial litigators are under increasing client pressure to keep costs in check, which has both sides testing the efficacy of alternative fee arrangements and the scope of reasonable discovery. Whether the “death of the billable hour” is ultimately realized, the keys to a commercial litigator’s success will continue to be strong client relationships, thought leadership, practical management skills, deep experience, and personal commitment.

Civil litigation is a lawsuit between two parties to enforce or defend a legal right where the plaintiff typically seeks compensation in the form of monetary damages from the defendant. Many different types of lawsuits fall under the broad umbrella of civil litigation. When businesses or companies are involved in a dispute, the lawsuit is generally known as commercial litigation Commercial litigation generally progresses the same way that other civil litigation matters do. These typical litigation stages are: retaining an attorney, conducting factual investigations, researching applicable law, sending demand letters, engaging in settlement negotiations, filing suit, conducting discovery, participating in motion practice, trying the case before a judge or jury, filing post-trial motions, and so on.

Commercial litigation is different from most other civil lawsuits by virtue of the involvement of businesses rather than just individuals, and because the issues involved are very specialized and typically more complex, both factually and legally. Many times, commercial litigation is filed in federal court, rather than state court, and can be a class action or multi-district litigation. Additionally, commercial litigation can take many twists and turns and persist for years as compared to other types of civil litigation. Commercial litigation also can be more expensive due to the costs of discovery, particularly e-discovery, and the costs of forensic experts.

There are many different types of commercial litigation, including the following:

• Antitrust

• Aviation Disputes

• Bad Faith

• Breach of Contract

• Breach of Fiduciary Duty

• Business Torts

• Class Actions

• Construction

• Debtor/Creditor

• Employment and Labor

• Fraud and Misrepresentation

• Insurance Coverage

• Intellectual Property and Patent Infringement

• LLC Member Disputes

• Partnership Disputes

• Privacy, Cyber-security and Data Breach

• Product Liability

• Real Estate, Land Use and Environmental Litigation

• Restrictive Covenant

• Securities Litigation

• Shareholder Disputes and Derivative Actions

• Tax Disputes

• Trade Secret and Unfair Competition

While this is not an exhaustive list of the types of commercial litigation, it highlights some of the more prevalent types of disputes that can arise in the business context. Political administrations change, laws change, rules and regulations change, court appointments change, the economy changes, and the business landscape changes. The commercial litigation environment is no exception. Several areas of business litigation are poised for change, or have already changed. Yearly case figures generally show that the volume of litigation and the time required to resolve cases is increasing. The following types of commercial litigation have experienced increased volume, and these robust trends are expected to continue.

• Cyber-security and Data Breach Litigation: Increased cyber-security and data privacy litigation is expected due to the escalating frequency, scale and sophistication of cyber-attacks and the resulting data breaches. According to one study, the average total cost of a data breach globally is $3.62 million, and the average global cost per lost or stolen record is $141. These costs incorporate legal expenditures, including litigation costs. In cyber-security and data privacy litigation, the key threshold issue is whether consumers have standing to seek relief for data breaches and improper disclosure of personal information. Also, states continue to expand and pass laws protecting consumer data. These state laws provide consumers with additional avenues for relief for data security breaches and are leading to increased lawsuits.

• Employment Litigation: Employment disputes are increasing and they are expensive, lengthy and injurious to an employer’s reputation. This trend of increased litigation arising out of the workplace is expected to continue. According to one study, the average employment claim takes 275 days to resolve and the average cost to defend and settle is $125,000. And, per the same study, for those employment claims that are not settled, the median judgment is approximately $200,000, which is in addition to the cost of a defense. However, the study found that about 25% of employment cases result in a judgment of $500,000.00 or more. But, per the study, some states have even higher chances of employee litigation.

• Securities Class Actions: Case records show that there was a significant uptick in securities class actions. This is an unprecedented spike in securities litigation activity.

Alternative Dispute Resolution

Arbitration and mediation are frequently employed to resolve disputes outside of the court; clauses compelling disputing parties to partake in the former are now often written into commercial contracts. Arbitration has become increasingly popular over the years for several reasons:

• It’s cheaper than traditional litigation. “Until there is some means by which we’re able to contain the extraordinary cost of litigation, we’re going to continue to see a trend toward arbitration, mediation and private dispute resolution.

• It affords more control over where disputes are resolved. “Arbitration protects corporations from far flung jurisdictions where they have little control and are not confident justice will be done,”.

• It affords more control over who tries a case as companies can select their decision makers. Also, “Corporations are also concerned that juries may not appreciate the complex aspects of a dispute.”

• Arbitration courts are private. Without press access, the case can be more shielded from public scrutiny and the company’s reputational damage contained.

Pre-litigation counseling and risk prevention

Litigators are often involved even before any dispute has arisen, whether that’s counseling clients on the ramifications of business decisions or ensuring compliance with laws and regulators. “We focus on risk analysis,” All good litigators understand that an appropriate evaluation of the matter in the first instance can significantly reduce exposure to litigation.
What partners do

• Fundamentally “a partner sets the strategic direction and ensures the team is always executing the plan designed to achieve it.

• When a case first arises, partners assess the facts, master the relevant case law and decide which dispositive motions can be brought, before considering evidence preservation and crafting a discovery plan.

• But, despite the necessary delegation, “the most successful litigators get their hands dirty,” You cannot be successful by just sitting in an office and figuring out strategy. You have to be part of the team implementing it,” whether that’s preparing witnesses for examination or drafting motions.

• If a case looks set to go to trial, partners may hold a mock court with their team and cart in a bunch of actors to play the jury. If the rent-a-jury finds the argument unpersuasive, incoherent and unintelligible you may have to rethink how you present your facts. “You always want to litigate a case through the rubric of your main themes. One mistake lawyers make is to over complicate a case. “It’s very important to figure out and focus on the two, four or five issues which matter most.”

• At trial partners run the case, conduct direct and cross examinations and deliver opening and closing statements.

With client budgets tightening it’s becoming a tough and competitive field for litigators as they clamor for fewer matters going around. Companies reluctant to splash the cash are turning to mediation or arbitration to settle disputes or directing their lawyers to keep costs down. While the amount of litigation may have fallen, cases that do make it to law firms are increasingly complex or high value. High profile data breaches have recently catapulted cyber security and privacy into the spotlight and it’s now one of the fastest growing practices out there.

High profile data breaches, a growing push for consumer protection and changes in regulation surrounding data sharing and privacy have highlighted the need for businesses to have a strong understanding of the law in this area. These changes in regulation and their increasing enforcement by state and federal authorities may prompt much business to amend their compliance procedures, while those who fall foul of the regulations will find themselves undergoing government investigations and prosecutions or facing class action suits.

You Need A Litigator

Being able to write effectively is an absolute must for litigators. “There is no substitute for learning how to write well. “It’s very important to be able to write succinctly, persuasively and clearly.” it’s about more than just being able to craft a well-worded text: Students leave law school with a great vocabulary and understand the basics but often they haven’t developed the forensic skills they need to become a convincing forensic writer. Litigators may be known for having the gift of the gab but it’s just as important to put your ears to good use. If you’re in a courtroom you need to listen to what the judge and opposing counsel are saying. So many lawyers at the beginning and end of their careers are tied to their scripts for their outline or witness examinations and are not listening to what the judge, opposing counsel or witnesses are saying. As well as remembering to listen in the courtroom, it’s also important to remember when not to speak (and yes, those are two different things). “Be patient,” You need to let things develop and have a sense of discipline to know when to weigh in and when not to speak. Sometimes, knowing when not to be a hard skill to master.” Learning the skills to become an effective litigator is one thing, but what about your general suitability for the practice? “You have to be someone who is willing to deal with uncertainty; litigation is inherently uncertain,”

Most pro bono matters are more likely to involve disputes concerning individuals than businesses. Asylum applications, protection orders, adoption procedures, securing benefits or advising on criminal justice appeals are some of the more common matters associates tend to handle. Pro bono outside the commercial litigation sphere is still an essential way to build skills, as juniors are able to gain more experience and responsibility than they would on a client billable matter. Partners may be on hand to offer guidance but juniors are much more likely to be handed the pen and run the whole case while handling pro bono. Legal research, drafting briefs and motions, taking and filing depositions, preparing clients for hearings and taking to the stand and representing the clients in court all fall to associates on pro bono matters. At Ascent Law, we do not accept pro bono matters at this time.

Why You Need Legal Services For Business

Once you’ve established a business, you likely won’t need commercial litigation unless you run into trouble with co-owners, members, or shareholders. However, other legal services for business can be very handy. Annual forms and filings can be taxing on business owners with too much on their plate. Legal services can help reduce that burden and keep things in order for when it comes time to file tax returns. For example, you may choose to have a third party apply for an EIN online on behalf of your business, or you may choose to have a third party complete and submit articles of organization if your choose to establish an LLC.

• An Employer Identification Number, or EIN for short, is a nine-digit tax ID number used by the Internal Revenue Service (IRS) to track tax obligations of various legal entities.

• You will need to obtain an EIN for you business if you plan to hire employees, if you operate a corporation, or if you wish to open a bank account in the name of the business.

• The easiest way to apply for an EIN online is to work with a third party service provider. Online applications can be complicated if you choose to work alone.

• You can apply for an EIN online and start using it tomorrow to complete several essential business tasks. Don’t wait to obtain this important tax ID.

Commercial litigation provides anyone within it with unparalleled experience in the wide range of business disputes that it encompasses under its umbrella.