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How in-house counsel can help businesses sidestep litigation
A GC has outlined the areas where litigation has grown and how legal departments could help their organisation avoid or navigate it.
Malavika Santhebennur
Ahead of her session at the Corporate Counsel Summit 2024, Katrin O’Sullivan, general counsel at non-profit organisation The Fred Hollows Foundation, observed that wills, probate, and family provision litigation continue to grow.
“This means that there are more estates where it is economic[al] to litigate, and the result has been a dramatic increase over the past few years in family provision litigation,” Ms O’Sullivan told Lawyers Weekly.
Her comments preceded her session on how in-house counsel could help prepare their business for litigation. She and a panel of speakers will outline the latest litigation trends, provide regulatory updates, and unpack strategies to manage cases effectively and build a robust litigation strategy for their organisation.
She also stated that the courts seem to be applying greater scrutiny to the funding of class actions and the remuneration for the lawyers conducting them.
DLA partner Kieran O’Brien recently told Lawyers Weekly that with the Federal Court again approving the making of common fund orders (which he said was a success for litigation funders), the class action regimes in Australia would face renewed activity by those eager to invest in such litigation.
A full court decision in 2023 provided certainty by confirming that Federal Court judges can make common fund orders in accordance with the court’s settlement approval powers.
How in-house counsel can help
There are a number of ways for in-house legal teams to help businesses minimise conflict in the first place to reduce the likelihood of any dispute escalating to litigation, Ms O’Sullivan pointed out.
Firstly, she said, safeguarding the business begins with drafting clear agreements that contain dispute resolution clauses, which provide for structured dispute resolution.
This should begin with negotiation, but if that is unsuccessful, it could progress to mandatory mediation, she said.
In cross-border transactions, it would be preferable to include an arbitration clause, as it is easier to enforce an arbitral award overseas than a cross-border judgment, Ms O’Sullivan advised.
“Our foundation strives to adopt a collaborative rather than adversarial approach to doing business with its partners, suppliers, and service providers,” she said.
However, if a business faces litigation, in-house counsel could help navigate it by assessing the level of risk and then retaining appropriately qualified external litigation lawyers, Ms O’Sullivan suggested.
She added that it is critical for the business to obtain an upfront estimate of the likely cost of the litigation.
“Businesses should be prepared to engage in both informal negotiations directly from one organisation to another by utilising existing relationships, in addition to participating in more structured alternative dispute resolution through their lawyers,” Ms O’Sullivan insisted.
In-house counsel could help ease this process by informing all stakeholders of the risks and potential costs so the business can budget and make provisions in its accounts accordingly, she said.
“It is prudent to obtain advice as to prospects early,” she stressed.
“In jurisdictions that have a distinction between solicitors and barristers, this may involve obtaining counsel’s opinion.”
While guiding businesses through the litigation process, Ms O’Sullivan pointed out, it is also important for legal departments to understand that Western methods for conflict resolution are not always culturally appropriate or effective when trying to implement them “out of context”.
“It is therefore important to be sensitive to local cultural norms and be guided by local lawyers as to appropriate dispute resolution strategies,” she concluded.
To hear more from Katrin O’Sullivan about how in-house legal teams could effectively manage litigation while minimising risk and achieving a successful outcome, come along to the Corporate Counsel Summit 2024.
It will be held on Thursday, 2 May, at The Star, Sydney.
Click here to buy tickets and make sure you don’t miss out!
For more information, including agenda and speakers, click here.
