The increasing globalization of business has led to increased disputes involving an international element. Litigation is often the last resort if alternative methods cannot settle a dispute.
Effectively managing a legal dispute in multiple jurisdictions requires experience and a deep understanding of the law. Learn about some of the biggest challenges that face lawyers working on cross-border litigation.
Jurisdictional Issues
Litigation is a costly and time-consuming way to resolve a dispute. When all other methods fail to resolve a dispute, it can be used as a last resort. A dispute involving several jurisdictions and applicable law issues can make the litigation more challenging.
For example, a court may not have personal jurisdiction over a defendant incorporated and based outside its jurisdiction unless the forum state’s long-arm statute and the defendant’s “real and substantial connection” test are satisfied. Similarly, the laws of different countries on international recognition and enforcement of judgments often differ, and a plaintiff may be better off choosing arbitration in a cross-border dispute to increase the chances that an arbitral award will be enforced in another country.
Disputes involving multiple countries can be complicated and pose legal and practical business challenges. To increase the chances of a favorable resolution in cross-border litigation, companies should take proactive measures to address jurisdictional issues, understand how to use international conventions and treaties, and seek legal counsel from multiple countries with experience in their respective legal systems.
Cultural Differences
Several cultural differences can arise in cross-border litigation. These include how different cultures communicate and how a person’s culture can influence their beliefs, values, and behavior. These issues can impact the outcome of the dispute and the process itself.
For example, in countries where business culture is heavily influenced by Confucian ideals (such as China, Korea, and Japan), there may be a greater emphasis on hierarchy within the workplace. It can mean that junior employees may feel uncomfortable disagreeing with senior colleagues and may attempt to align their recollections with their superiors.
It can create tension in arbitration proceedings. For this reason, advocates need to understand the cultural context of their case and the personalities involved. It will help them develop a more effective persuasion strategy.
Language Barriers
The increasing globalization of business has inevitably resulted in a dramatic increase globally in litigated disputes where parties are based in different jurisdictions or have an international aspect (such as the location of evidence or assets). Companies with global operations must be aware of and prepared for cross-border litigation and consider including mediation clauses in contracts.
However, despite the apparent challenges of direct negotiation between businesses from very different cultural backgrounds, mediation has proven to be an effective way to resolve these commercial disputes. That is because mediation provides a neutral platform for both parties to communicate their positions without being subjected to the influence of their cultural background.
In addition, the fact that a mediated settlement agreement can be enforced in state courts is an essential factor in its effectiveness. It is a significant advantage over the current situation where an overseas court must adjudicate a dispute. Depending on the complexity of a dispute, this can lead to lengthy delays before a final decision is reached, and it may be difficult for companies to rely on overseas courts as an alternative to their own.
Time Differences
The globalization of significant business sectors goes hand in hand with managing legal disputes involving multiple jurisdictions. A company that lands itself in the crosshairs of regulators in one jurisdiction will likely draw scrutiny from other regions, so it must consider all relevant legal and regulatory risks when developing its dispute management strategy.
Managing a case across borders requires more management time than domestic litigation because strategy meetings, document reviews, depositions, and trials frequently occur outside the counsel’s home jurisdiction. When a company is involved in a high-stakes case, it can be a significant challenge.
Efficiently managing discovery in and development of evidence from multiple jurisdictions requires a balance of consistency in case direction with curiosity and creativity. A lack of familiarity with international processes can lead to unforeseen discovery issues that could impact a company’s case strategy. A thorough evaluation of management time should be part of an early case assessment. It is also important to evaluate existing preservation protocols in each jurisdiction. If a protocol is ineffective, counsel should proactively explore alternatives with expert local counsel.
Costs
Globalization has resulted in an increasing number of disputes involving international issues. These involve a variety of legal and practical challenges, from navigating different laws to dealing with the differing cultural attitudes toward litigation.
Litigation in foreign jurisdictions can be costly. The complexities of international discovery, language barriers, and time differences contribute to the cost. Even the most straightforward cases can be expensive and may require the services of expert local counsel.
Another consideration is that a company’s assets or evidence, including intellectual property and witnesses, are scattered across several countries and legal systems. It can lead to a more fragmented approach to gathering and reviewing evidence.
When a dispute arises, prompt action is necessary to preserve the company’s rights and avoid irreparable harm. It often involves obtaining interim relief such as a temporary restraining order or preliminary injunction. It is crucial to have an established firm with experienced litigation lawyers familiar with the legal process in foreign jurisdictions. It can ensure that any foreign litigation is conducted as efficiently and effectively as possible.