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  1. 1. Litigation prevention Cost-effective resolution of lawsuits
  2. 2. Oh My God ! I am S.UED!!! I am a lawyer ..!
  3. 3. 1.2 Million Lawyers in US today roughly the same as India which produces 80,00 a year
  4. 4. 1970 1992 2010 0 50 100 150 200 250 300 Increase in Litigation Time in case disposition 1970 1992 2010
  5. 5. Strict Liability principle (Escola vs. Coca Cola) Results in product warning labels Remove child before folding On a child car safety seat This product moves when used A motorized go-cart. Use of a headset that covers both ears will impair your ability to hear other sounds On a Bluetooth headset. Harmful if swallowed On a brass fishing lure
  6. 6. 1960s concept of Contributory Negligence becomes common (allows recovery despite plaintiffs fault but reduced to that degree) Rise in Punitive Damages (Juries look to send a message David vs. Goliath story!) Increase in class actions (anti-trust, securities, consumer, environmental and employment) Environment, Health and Safety Regulation & litigation Corruption Enforcements
  7. 7. Globalization of commerce brings bigger challenges. Technology is a contributor of costs ! World is suddenly being over-regulated.
  8. 8. How do we measure litigation risk? No. of lawsuits? Dollar costs in defense/prosecution? Executive time? Role of lawyers is to estimate what can be achieved and what are the likely financial costs. What can be achieved is a function of law, evidence, expected actions of adversary, and judgments of third parties (judges and juries). However, lawyer must also identify and capture relationships between each liability and damages issue and assign numerical probabilities. Take help if needed !
  9. 9. Post SOX, focus on Governance, Risk and Compliance Policies & Procedures (code of conduct, gifts & entertainment, use of company resources, etc.) Training & Communications Testing Due diligence employees, vendors, counterparties.. Accounting and financial controls Develop risk map & plan strategy Product risk Enterprise risk Customer & counterparty risk Regulatory risk Environmental risk Market risk Employment risk
  10. 10. Negotiation Mediation Conciliation Arbitration Outright settlement for certain types of litigation
  11. 11. Types of litigation the company faces (historical data analysis) Frequency Work with insurance and risk management teams to determine causes Determine legal basis for liability and evidence that leads to damage awards Business intelligence internal and external Implement preventive practices Ongoing review (matter management applications can be helpful)
  12. 12. Situation: New retail banking business Various product lines and territories added simultaneously Deficient customer complaint redress system Complaints growth exponential early warning not heeded Legal notices 0 50 100 150 Month1 Month2 Month3 Month4 Month5 Month6 Cards Banking Advisory
  13. 13. Classification :
  14. 14. Types of litigation - bucketing Delay in service Interest waiver Compensation Alternate reward Activation Offer upgrade Personal service Compensation Transaction dispute Waiver of charges Compensation Coordination with payment firms viz. Visa, MasterCard Loan approval * Reasoning * Alternate terms or offers of service * Templates of response
  15. 15. Training of customer service resources Use of templates Determine compensation levels delegation of authority Employ lawyers with different skills/attributes create a special cell Strategy predicated on settlement Significant reduction in litigation automation of process saving of legal resources & costs
  16. 16. Objective: Predictability & Certainty Can satisfy each others interest Better financial deal Retain business relationships How to? Determine corporate objectives and bearable costs Disclaimer: THIS DOES NOT AFFORD A ONE-STOP SOLUTION
  17. 17. Replication of model in HR area (Disciplinary Actions, Terminations, etc.) Collections Vendor disputes
  18. 18. Data collection and analysis is critical for any litigation management Outside counsel fees Out of pocket expenses Litigation budgets vs. actual costs In-house time spent in managing litigation (legal, finance, human resources, operations, management..) Categories of lawsuits Estimated net present value Probability and reserves Final judgments favorable/unfavorable A good matter management application can be useful.
  19. 19. Phase &Task tool developed for litigation management Online tool to prepare detailed costs estimate broken down in phases After client approval, Lawyers post their time against Tasks with details of work performed Actual costs versus estimates are tracked in real time for each phase Clients have access to review reports in real time Automatic email alerts are available for certain triggers viz. costs hitting 75% of estimates Predictability and no surprises for client in billing Cost consequences known if case is not settled and drives into next phase