Legal news and trends for Canadian in-house counsel and c-suite executives
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often found in computer monitors and flat-panel televisions. Epson is one of several global companies targeted in the actions, which involve allegations of price-fixing and other anti-compet- itive behaviour. While Mori is unable to comment on the approach taken in that ongoing litigation, he asserts his first move when these matters arise is to retain top-notch outside counsel. That's particularly important in class actions involving multiple defendants — the pool of unconflicted and compe- tent firms can quickly dry up, and the company could end up with inferior representation if the services of a top firm aren't quickly retained. Mori emphasizes that parallel U.S.- Canada class actions can cost as much as US$30 million to defend once fees for experts, outside counsel, and ven- dors are factored in. The financial com- mitment can soar exponentially when investigations in multiple jurisdictions are factored in, along with the poten- tial for additional opt-out cases in the U.S. That's not to mention the pos- sibility of state attorneys general suing companies on behalf of residents or governmental agencies who may have purchased a product or service that has been called into question. On top of all that, authorities may target certain company executives for their personal roles in a matter that has prompted class action litigation — organizations are typically responsible for bankroll- ing those defences. In light of these cost considerations, Mori encourages corporate counsel to conduct a cost-benefit analysis when pondering a settlement agreement. "Quantitatively, it could simply be the math of, 'Well, how much is it going to cost me, and what is my exposure, and what good defences do I have, etc.'," he says. "Qualitatively, you have to think about the impact on the reputation of the company and those kinds of things." If a decision is made to go forward with the defence, it's crucial to include solid outside counsel guidelines in any retainers. Those guidelines should include the company's expectations for the firm, and what the firm is permit- ted to bill for. Efforts should be made to minimize intra-firm conferences and maximize efficiencies by eliminating the duplication of work, says Mori. A detailed litigation plan, which includes phases and cost estimates with rigid budgets, is also essential for man- aging expenses, he adds. Firms should also be encouraged to avoid conducting work too far in advance. "You certainly don't want to be unprepared, but on the other hand, you don't want to have the firm doing research and work that would be relevant later but not now," he says. "That work would have to be revisited at the later time, or if some- thing intervenes and that work becomes unnecessary, then you've authorized work that wasn't required." Tim Buckley, national leader of Borden Ladner Gervais LLP's class actions group in Toronto, says a costly oversight in many parallel class action defences comes in the document pro- duction process. He says defendants are wise to seek an order from the U.S. court stipulating that any document provided can be used only for the U.S. litigation, and may not be passed along to Canadian plaintiffs' counsel. Many corporate counsel, unaware of the level of co-ordination between class counsel in both countries, have had to learn that lesson the hard way. This is partic- ularly troublesome for companies that have settled a defensible class action due to cost concerns, or to simply put to rest an action involving a product it no longer sells. Buckley has worked with in-house lawyers who were shocked to discover that documents turned over in a settled U.S. action have been used in a separate lawsuit in Canada. After all, litigation THE ROLE OF CORPORATE COUNSEL T im Buckley, national leader of Borden Ladner Gervais LLP's class actions group, says his firm can better defend Canada-U.S. parallel class actions when corporate counsel take a hands-on approach to the litigation. "It's a huge role the corporate counsel has in driv- ing the team," says Buckley. With that in mind, here are his thoughts on the roles and tasks for corporate counsel to assume during parallel U.S.-Canada class actions: • be responsible for assessing the reputational and litigation risk to the management and board; • actively work to minimize disruption in operations, so that outside counsel can consult and get the information that they require, but in an efficient way that doesn't hamper the company's ability to continue its core business operations; • act as the point person for the communication of instructions, so that outside counsel are not consulting with and receiving directions from different sections in the organization; • serve as the key resource to identify where answers can be found within the organization, this requires that corporate counsel have a keen understanding of business units and reporting structures; • co-ordinate the public relations campaign surrounding the class action; and • control the legal budget and spend rate. INHOUSE DECEMBER 2010/JANUARY 2011 • 17