Trends in commercial and financial disputes

January 2013 | MARKET OUTLOOK 2013

Financier Worldwide Magazine

In 2012 we saw the continuation of a number of disputes which emanated directly or indirectly from the credit crisis. There has been continued banking litigation, multiple investigations by regulators in the UK and abroad (LIBOR has become a dirty word), disputes arising from cuts and pressures in the public sector or full-blown nationalisations, and many commercial disputes arising from the general liquidity crunch and consequent restructurings or insolvencies. As a result, the litigation and arbitration cases in 2012 have pushed case management, strategy and funding to new levels of sophistication and complexity.

While most of the disputes that arose in the immediate storm of the credit crunch in 2008 are reaching an end, others look set to replace them in light of the ongoing eurozone sovereign debt crisis and the economists’ view that the outlook for economic growth in the UK and Europe is tentative at best. As a result, pressure continues to grow on in-house lawyers to do more with less and on their external counsel to manage their disputes more effectively and efficiently. This is no mean challenge in a commercial landscape that is increasingly international and complex.

Four years on from the collapse of Lehman, litigators (both in-house and in private practice) have learnt a number of lessons from the events that have transpired and the cases that followed. For example, practices in documentary disclosure and case management have developed in the English courts, whilst revisions to arbitral rules have appeared and even new institutions geared solely to the resolution of complex financial disputes. However, the challenges continue to grow and contentious lawyers, like their transactional colleagues, will have to continue to strive to meet the challenges of an uncertain and dynamic future.

One consequence of the trends identified above is that parties increasingly seek innovative funding arrangements for their costs (e.g., third party funders and conditional arrangements ) and are particularly sensitive to the economic repercussions (i.e., share price) of communications relating to their disputes.

A further obvious consequence is that enforcement of rights overseas is an increasingly frequent issue, which requires careful consideration from the planning of a transaction, to the early stages of dispute management and throughout any ensuing contentious process. In international disputes, a successful party cannot assume that it will readily receive the judgment sum. In an environment of scarce resources and different enforcement mechanisms, early compromise may often prove more cost effective than fighting for a judgment that may prove unenforceable. These sorts of challenges have led to a greater need for early planning among legal teams, alongside a need to coordinate and anticipate legal and procedural arguments in several jurisdictions.

Melis Acuner

Associate

Skadden, Arps, Slate, Meagher & Flom LLP

T: +44 (0)20 7519 7164

E: melis.acuner@skadden.com

www.skadden.com

Melis Acuner

Skadden, Arps, Slate, Meagher & Flom LLP