This document discusses strategies for managing litigation risks and costs. It begins by describing the rise in litigation over time due to factors like increased regulation and class action lawsuits. It then provides examples of warning labels required on products due to strict liability laws. The document recommends developing a risk map to identify key risk areas and implementing policies and training to prevent issues. It also advocates using alternative dispute resolution techniques like negotiation and mediation to resolve lawsuits in a cost-effective manner. Finally, it stresses the importance of collecting litigation data and using matter management applications to track costs and facilitate budgeting and cost control.

4.  Litigation prevention
 Cost-effective resolution of lawsuits

5. Oh My God !
I am S….UED!!!
I am a lawyer ..!

6. 1.2 Million Lawyers in US today roughly the
same as India which produces 80,00 a year

7. 1970
1992
2010
0
50
100
150
200
250
300
Increase in
Litigation
Time in
case
disposition
1970
1992
2010

8.  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

9.  1960s – concept of Contributory Negligence becomes common (allows
recovery despite plaintiff’s 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

10.  Globalization of commerce brings bigger challenges.
 Technology is a contributor of costs !
 World is suddenly being over-regulated.

12.  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 !

13.  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

14.  Negotiation
 Mediation
 Conciliation
 Arbitration
 Outright settlement for certain types of litigation

15.  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)

16.  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

17.  Classification :

18.  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

19.  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

20. Objective:
 Predictability & Certainty
 Can satisfy each other’s interest
 Better financial deal
 Retain business relationships
How to?
 Determine corporate objectives and bearable costs
 Disclaimer: THIS DOES NOT AFFORD A ONE-STOP
SOLUTION

21.  Replication of model in HR area (Disciplinary Actions,
Terminations, etc.)
 Collections
 Vendor disputes

22.  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.

23.  ‘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