Cross-border legal disputes are a fixture of our global economy. As a result, companies headquartered outside of the United States often find themselves involved in U.S.-based litigation or arbitration. This experience is often a culture shock for international clients. Expansive discovery, jury verdicts, and public proceedings are hallmarks of litigation in the U.S. And even arbitration proceedings based in the U.S. are often significantly different than overseas. Arbitrators trained in U.S. law often have certain expectations about the discovery process and apply their U.S.-based understanding of legal concepts, which often differs from how other countries interpret the same concepts.
Key differences
In the U.S., dispute resolution is an adversarial process. Each side has the goal of winning the dispute, generally by obtaining an award of damages (plaintiff) or avoiding paying damages. No matter which side wins, each side is usually responsible for its own attorney's fees. As a consequence, in the realm of commercial disputes, often only matters with significant potential damages are tried to a verdict. It is not cost-effective for either party to continue to litigate if the legal fees are more than the potential recovery.
Discovery is another significant cost in U.S. litigation. Most rules of procedure in the U.S. require companies to collect, review, and produce relevant documents to the other side, even if the documents produced are not admissible in evidence. This can be a significant burden because it requires attorneys and vendors to spend substantial time collecting and reviewing documents, many of which will never be used to resolve the dispute. In addition to document discovery, depositions are a key piece of U.S. litigation and require hours of attorney time in preparation and execution.
The prospect of a jury trial may be the starkest difference between U.S. litigation and dispute resolution worldwide. The U.S. is one of the few countries that provides for trial by jury for civil disputes. Juries are notoriously unpredictable. So much so that there is an entire industry of “jury consultants” who advise legal teams on jury selection and trial strategy, with the goal of influencing the jury result. This unpredictability is frustrating for all clients, especially foreign clients who lack experience with the concept.
Key similarities
No matter the forum, the key to effective and efficient dispute resolution is a practitioner who understands the rules and procedure of the forum, listens to the client’s goals, and can think creatively to limit cost inflation and unpredictability.
This all comes down to preparation and communication from the beginning of the engagement. A practitioner needs a clear understanding of the underlying facts so that he/she can craft the best legal argument. But he/she must also communicate with the client about their goals for the dispute. Sometimes the client would prefer certainty, even if it means settling a winnable claim. And other times, the client would prefer to win, even if the legal costs are greater than what it would have paid to settle. These basic principles apply to all dispute resolution, no matter the forum!
Best practice
The best way to provide valuable legal services for an international client is the same as for a U.S.-based client: listen to the client, gather the facts, be familiar with the relevant rules and procedure, and communicate with client about every step of the process.
