Dispute management – An overview

Date: 16 Nov 2022

Silvia Ricciardi

Citywealth talks to dispute and litigation experts to get an overview on the recent increase in disputes, looking at new adopted solutions to replace traditional hearings and getting an insight on a range of issues faced by their clients who have to go to court.

In the current economic climate, UHNW and HNW individuals who find themselves in disputes have to face an overloaded court system, which is seeing longer timeframes to resolution. Citywealth talks to dispute and litigation experts to get an overview on the recent increase in disputes, looking at new adopted solutions to replace traditional hearings and getting an insight on a range of issues faced by their clients who have to go to court.

Our experts agree in confirming that there has been a general increase in different areas around disputes in the current economic climate. Simon Davies, Partner at Ogier, talks about contentious trust matters and regulatory issues: “There has been a noticeable increase in contentious trust matters, including matters where a trustee is seeking to have a momentous decision blessed by the Court, exercising its supervisory jurisdiction over Guernsey trusts. There have now been a number of matters where the Court’s jurisdiction in relation to trusts has also engaged its jurisdiction in relation to structures that are or might become insolvent. There has also been a noticeable uptick in the number of regulatory issues that our licensee clients are involved in – that may in part be because of a MONEYVAL visit to Guernsey scheduled for 2024.”

Neil Long, Partner and Head of Private Capital at Womble Bond Dickinson, focuses on the three areas around their dispute practice where they have witnessed a clear increase: “Firstly, we have seen more disputed statutory will applications. These are a bit unusual in that they involve the court in determining will disputes before the individual has died. In certain circumstances, though, these types of disputes can provide quicker and cheaper solutions for a family than a conventional post-death will validity dispute. Secondly, we have seen an increase in the number of proprietary estoppel cases coming across our desks. Typically, these disputes involve landowning client and the profile of our client base exposes us to these types of clients.

The increase in the number of cases we are handling is reflected in the increase in the overall number of reported cases in this area. Finally, we are seeing a lot more equitable mistake applications. These are cases where clients have set up or changed the terms of a trust without understanding the possible consequences, mostly unwanted tax consequences. Clients come to us to see if we can reverse the steps they have taken, in many cases when there is significant tax at stake.”

Rachel Atkins, Partner at Schillings generally comments: “We find that disputes tend to increase in times of recession, so I anticipate we will see more in the coming months as people focus on what they did or didn’t receive – rather than just focussing on going forward.”

Ultra-high-net-worth and high-net-worth individuals are increasingly challenging regulators in different sectors, such as the crypto universe, as reported by Prateek Swaika, Partner at Boies Schiller Flexner: “We have seen a marked increase in cross-border cryptocurrency related disputes of all types, including UHNWIs and HNWIs in disputes with currency exchange platforms and regulators, and platforms in disputes with UHNWIs and HNWIs and regulators.

UNHW and HNW individuals are also increasingly challenging regulators in a variety of sectors, such as the Serious Fraud Office in connection with its white collar crime investigations regarding them or others, the National Crime Agency in connection with its handling of suspicious activity reports made to them, the Information Commissioner’s Office in connection with their, and others’, alleged breaches of data protection legislation, and enforcement agencies in connection with account freezing orders and account forfeiture orders.

They are also taking steps to protect their investments in corporates facing restructurings and insolvencies. Given the current economic climate – rising inflation and the high cost of borrowing as well as the end of Covid-era relief, this is perhaps unsurprising.

Recently, we have also seen interest from UHNWIs and HNWIs looking to fund third party litigation, either on a sole claim or a portfolio basis, as a way to diversify their portfolio and obtain better yields. My partners, David Hunt, Timothy Foden and I routinely advise investors on merits and enforcement risks in connection with their investments in various proceedings and on the strategy and management of portfolio cases with a view to realizing commercial value.

In the age of social media and rampant misinformation, reputational management is also on the uptick. UHNWs and HNWs have personal reputations at stake and the wherewithal to pursue defamation claims. An increasing number have been turning to us to protect their ‘brand value’, even if it means they are compelled to litigate in order to do so.”

When alternative dispute management options are not a suitable choice, a trial seems the only possible solution, but uncertainty in court and loss of confidentiality are factors which can’t be ignored.

Rachel stresses that “there is no certainty in court, that’s the risk! Judges are unpredictable whatever the law. In addition, your client can be cross examined on almost anything. In my experience, clients always think they will be fantastic in the box, until they think it through the night before.”

So what could be done in order to avoid these risks? Rachel advises: “Clearly the best result is to get almost everything you want from a settlement – without the risks.  But nothing is ever that simple – it’s really about compromise. And if you can’t get what you want, and the odds are in your favour, then go to court.”

Neil agrees: “Always avoid a trial if you possibly can. Even with the strongest case, witnesses may not come up to proof and judges can be unpredictable. It’s best to run the case on the basis it will go on to trial as it helps the parties focus on the issues the Court will be interested in. But in parallel with that, always look for the off-ramp; is there a compromise that the parties can live with?”

“I always ask my clients at the outset what success means to them, as it means different things to different people and can evolve during the lifetime of a case,” says Prateek. “As trial lawyers, we always prepare to litigate to the end to secure a win for our clients. I know when to stand firm but also when to negotiate. Trials create a binary win or lose situation that can be inherently risky, particularly for clients that need a quick commercial solution rather than a lengthy judgment obtained after protracted, costly litigation. Added concerns include PR fallouts and loss of confidentiality. I’m dogged when I need to be, but I also keep under review the commercial objectives at play throughout the lifetime of each case.”

Digital change and implementation of new technology has been a constant over the past years. Our experts confirm digital change has had a concrete impact on how disputes are managed, impacting costs and time management.

The Court system switching to electronic filing has been a major change, according to Neil: “Everything the Court sees is e-filed, and that impacts on case management. Bundles are now manipulated, indexed and paginated electronically which is a massive advantage both in terms of ease of use and reduction in paper. Managing disclosure electronically has now also become the norm and the use of AI assisted search systems is now commonplace, vastly reducing human time on keyword searches.”

Digitisation of documents is key also for Simon: “We are constantly seeking out ways of working more effectively and better putting our people first (both the Ogier team and our clients). Cases can be managed much more effectively thanks to new digital tools – for example, at Ogier we make use of secure digital platforms to provide one central location for all documents and communications between us and our clients, which also greatly speeds up court bundles compilation by digitising the process. Thanks to secure digital solutions and an international team across time zones, we are able to work remotely everywhere all of the time, and matters can be picked up overnight in another jurisdiction and handed back when the other team is back online. We can provide clients with access to their key documents and materials electronically, collaboratively and securely.”

Prateek adds: “Digital change has been a mixed blessing for dispute resolution. An ever-increasing number of communication methods and platforms has led to an explosion in the sheer number of documents that the parties, their legal teams and the courts now have to review and argue over. In turn, this has had a significant impact on the time and costs involved, and the number of satellite disputes over document production. Our clients often store and back-up data in multiple devices across multiple jurisdictions that are often subject to varying data protection regimes. The rules on disclosure, intended to facilitate efficiency and costs savings, are still playing catch-up with the rapid pace of digital advancements.

On the other hand, we now routinely use electronic disclosure platforms and astonishingly clever artificial intelligence software to speedily predict and review data for relevance, even in foreign languages. One of our recent cases involved more than 170,000 potentially relevant documents and AI narrowed it down to 800 key documents for us to review.

We also use electronic file management systems to manage, securely store and share documents to optimise productivity, which is especially helpful with large submissions that require collating numerous exhibits and real-time collaboration with multiple reviewers.

We also use specialised software to assess our client’s prospects of success, determine litigation strategy and monitor costs. With litigation data analytics, one can now see the success rate of specific claims before the English courts., We can see, for example, how many securities litigations succeeded in the past two years, before which judge and by which lawyers, or the success rate of appeals to specific judges. This has changed our approach to effective litigation strategy that saves costs for our clients.

For hearings, we now routinely deploy specialist trial presentation software to transform our arguments and complex case content, such as lengthy chronologies, corporate structures, and causation theories into clear and cogent visual presentation. This frees up valuable court time that would otherwise be required to take the judge or tribunal through key facts.

A key change following Covid, both in arbitrations and litigations, is the increasing use of virtual hearings and meetings. This has led to a significant saving in time and cost, especially where counsel, parties and witnesses from multiple jurisdictions are involved. We are also seeing a trend towards hybrid hearings. I am currently representing a client in a lengthy trial with a number of witnesses and counsels from both sides attending virtually from abroad. This would not have been possible even a couple of years ago. It also keeps carbon footprint low.”

Rachel recognises the positive aspects which come with technology, but also dwells upon the quite negative implications: “There is both a good and bad impact of technology generally – and we can also see this when managing disputes. Gone are the document rooms where young lawyers spent years of their lives; a huge plus. But the volume of information has increased massively.

Due to the ease and speed of sending emails, they are often sent without careful thought. Frequently, they are copied to numerous individuals (not all of whom may have been required recipients). This means the quantity is voluminous and sometimes it can be like looking for a needle in a haystack.  And of course, everything in writing can be used in court. One thing I would say is crucial: think before you write, do you really want that to end up in print before a judge?

Further, the impact of the digital shift on how disputes are managed can be seen in the rise of remote hearings. These came to the fore during the pandemic but continue to be used today in place of in-person hearings. In the climate of transport strikes, protests and inclement weather that we live in, remote hearings are efficient and convenient – as long as you have excellent Wi-Fi. However, for getting key points across, in my view nothing beats being there in person.”

… you will get out of the process what you put into it. Work closely with your lawyers, keep them informed, provide all relevant information at an early stage, leave time to prepare for trial, and budget for the fact that a trial will take up a lot of management time. Alternatives to this approach will usually compromise your chances of success.

Prateek Swaika, Boies Schiller Flexner

… it is fundamental to stay calm and answer the question. Don’t try to outsmart your opponent’s barrister or argue the case from the box.

Rachel Atkins, Schillings

… there is virtually always some alternative to going through the Court process, so my advice would be to avoid going to court. It may take some imagination and careful thought to identify alternative strategies and solutions but that is almost always a process that is worth going through to identify one best way to proceed.

Simon Davies, Ogier

… If there is really no option, then the advice is to be 100% prepared and to hunker down for a really tough time. But there is almost always an off ramp, even at the latest stages. It may not be attractive, but clients should really pause and step back from the detail, see the bigger picture.

Private client litigation can be exceptionally difficult for the parties as it is often bound up in deep-rooted family relationships. It is important to try and be objective about the case as its all too easy to get drawn into personal vendettas and acrimony. For that reason, choosing a solicitor with relevant experience is of crucial importance.

Neil Long, Womble Bond Dickinson