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Pension Plans and Class Actions: The Vivendi Case

Abstract: ON January 16, 2014, the Supreme Court of Canada1 affirmed the judgement of the Quebec Court of Appeal2 which had authorized the class action brought against Vivendi Canada Inc ("Vivendi") This important decision confirms, among other things, that the rules for authorizing class actions in Quebec are more liberal than those in the common law provincesI The FactsSeagram Ltd ("Seagram"), which was established in 1857, over time became one of Canada's leading producers of wine and spirits Its head office and principal place of business were in Montreal, QuebecIn 1977, Seagram set up a supplemental health insurance plan for its management and non-unionized employees (the "Plan") The Plan covers eligible employees both while employed and after they retireOver the years, the Plan was modified on a number of occasions In 1985, Seagram amended the document describing the terms of the Plan, adding a unilateral amendment clause pursuant to which it reserved the right to modify or suspend the Plan at any timeIn December 2000, Vivendi SA acquired Seagram, which had over 700 employees at the time In December 2001, Seagram's assets relating to the production of wine and spirits were sold to Pernod Ricard and Diageo, and Seagram ultimately became VivendiIn September 2008, Vivendi told the retirees and beneficiaries that amendments to the Plan would take effect on January 1, 2009 (the "Amendments"):* the annual deductible retirees and beneficiaries had to pay would be substantially increased;* only prescription drugs on the list of drugs for the province of residence of retirees or beneficiaries would henceforth be reimbursed;* a lifetime maximum of $15,000 for all coverage under the Plan would be introduced whereas there was none beforeIn 2009, Michel Dell'Aniello applied to the court for authorization to institute a class action and asked that he be ascribed the status of representative of the following persons:[translation] All retired officers and employees of the former Seagram Company Limited who are eligible for postretirement medical care under Vivendi Canada Inc's health care plan ("Plan") and eligible dependents within the meaning of the Plan ("beneficiaries"), as well as, with regard to the damages claimed, the successors of any such officers, employees or beneficiaries who have died since January 1, 2009Mr Dell'Aniello sought, among other things, a declaration that Vivendi illegally amended the Plan, and to have the Amendments cancelled and the Plan reinstated as it was before the Amendments The proposed group includes some 250 retirees or surviving spouses of retirees who worked in six provinces-134 in Quebec, 82 in Ontario, 3 in Alberta, 16 in British Columbia, 2 in Saskatchewan and 13 in ManitobaII The Quebec Superior Court Decision1On August 3, 2010, the Quebec Superior Court dismissed Mr Dell'Aniello's motion for authorization to institute a class action Contrary to what Vivendi claimed, the judge held that, pursuant to article 3148 (3) of the Civil Code of Quebec ("CCQ"), Quebec authorities have jurisdiction to hear the action provided the class action is authorized The court found that it is easier and more convenient to institute the class action in Quebec since over half of the potential group members (57%) live in QuebecThe Court refused to authorize the class action, finding that it raises a range of individual recourses and that the requirement that there be similar or related questions of law or fact as required by article 1003 a) of the Code of Civil Procedure ("CCP") was not met In his view, the class action is therefore not the most appropriate procedural vehicle He was of the opinion that if the action was authorized, the judge would have to conduct a detailed review of a multitude of individual circumstances, which would constitute a multitude of mini-trials Because the right to insurance benefits crystallizes at the time of retirement, the intention of the parties with respect to the vesting of rights must be determined as of that time …

Tomorrow's Lawyers

Abstract: MY original motivation in writing my latest book, Tomorrow's Lawyers, was to provide young and aspiring lawyers with some sense of what the future might hold. When I studied law in the late 1970s and early 1980s, my fellow students and I did not anticipate major upheaval in the legal world. We expected law firms to grow but we did not anticipate major changes in the way in which lawyers would advise their clients or in the manner in which our courts would operate. In contrast, looking 30 years ahead, I think it unimaginable that our legal systems will not undergo vast change. I say this because I believe there to be three drivers of change that will combine to transform the legal landscape, radically and internationally. My first driver of change is growing cost pressures on lawyers. I call this the "more for less" challenge--how can we deliver more legal service at less cost? This challenge is relevant for all clients, from general counsel in the world's largest corporations through to individual consumers. In these dismal economic times, the drive towards lower cost service is relentless. The second pressure will flow from the liberalization of legal services and, in particular, from allowing non-lawyers to compete in the legal marketplace. Although this liberalization is restricted today to a small number of countries, I predict that its global impact will be profound and many other jurisdictions will follow suit before too long. The third is information technology and especially the Internet. Technology is transforming the social and economics lives of us all. I see no reason that lawyers and courts should be immune from its reach. Crucially, though, the systems that are likely to exert greatest impact are "disruptive technologies". This means that they will not support, sustain, and enhance the way that lawyers and law firms have worked in the past. Instead, these technologies--such as online dispute resolution and intelligent search--will fundamentally challenge and change legal work. In combination, then, the "more for less" challenge, liberalization, and disruptive technologies are set to bring greater change in law over the next two decades than we have seen in the last two centuries. Or so I claim. Accordingly, I think it important that young people who are planning to enter our profession are exposed to some thinking about the ways in which their careers might unfold. The future of law, I say, will be neither Grisham nor Rumpole. Rather, it will be virtual courts, diagnostic expert systems, commoditization, alternative sourcing, internet-based global legal businesses, web-based simulated practice, and much more. What I try to do in the book, therefore, is to explain how and why there will be radical changes in the legal market, and what this means for law firms, for in-house counsel, for the courts and judges, and for consumers of legal services. I also try to offer practical guidance for young lawyers--on what new legal jobs there are likely to be, who will be employers of lawyers in the future, and what our law schools should be thinking and doing about the future. Although the book was conceived as an introduction to the future for tomorrow's lawyers, when I asked various clients and colleagues to read early drafts, many said that it is also a useful primer for more seasoned practitioners. In the words that follow, I discuss three topics that are central to the book and, I hope, of interested to lawyers everywhere--decomposing and alternative sourcing, liberalization, and legal education. I. Decomposing and Alternative Sourcing Over ten years ago, I came up with an idea that has gradually gained traction in the legal world--that we can look at the delivery of legal work as a form of production process, and one to which we can bring all manner of new efficiencies. Legal matters such as deals and disputes, I claim, are not indivisible professional engagements that must all be sourced and delivered in one way (conventionally by an attorney in a law firm). …

Canadian Price-Fixing Class Actions: The Supreme Court of Canada Gives the Green Light to Indirect Purchaser Claims

Abstract: ON October 31, 2013, the Supreme Court of Canada released its highly anticipated rulings in Pro-Sys Consultants Ltd. v. Microsofi Corporation,1 Sun-Rype Products Ltd. v. Archer Daniels Midland Company,2 and Infineon Technologies AG v. Option consommateurs.3 In this trilogy of decisions, the Court considered, among other things, whether defendants in price-fixing and other class actions are entitled to invoke the "passingon" defense, whether indirect purchasers have a cause of action at law, jurisdictional issues, the appropriate standard of proof for certification under provincial class proceedings legislation, and whether aggregate damages provisions in such legislation can be used to establish liability.I. Rejection of the Passing-On DefenseLike the Supreme Court of the United States in Hanover Shoe Inc. v. United Shoe Machinery,4 the Court rejected the passing-on defense, confirming that it is "inconsistent with the basic premise of restitution law",5 "economically misconceived,"6 and "would force a difficult burden of proof on the plaintiff to demonstrate not only that it had suffered a loss, but that it did not engage in any other transactions that would have offset the loss."7II. Indirect Purchasers Have a Cause of ActionUnlike the approach taken by the majority of the Supreme Court of the United States in Illinois Brick v. Illinois,8 the Court concluded that prohibiting the "offensive use of passing on" was not a necessary corollary to its rejection of the passing-on defense, and that indirect purchasers therefore have standing to sue for losses passed on to them. In reaching that conclusion, the Court held that: (a) the risks of multiple recovery and the concerns of complexity and remoteness are insufficient bases for denying indirect purchasers a right of action; (b) the deterrence function of Canadian competition law is not likely to be impaired by indirect purchaser actions; (c) although the passing-on defense is contrary to basic restitutionary principles, allowing passing on to be used offensively promotes those very principles; and (d) there are numerous reasons to question the rationale of the rule in Illinois Brick, namely, the existence of numerous so-called "repealer" statutes at the state level, a report to Congress recommending its reversal at the federal level, and recent doctrinal commentary calling for Illinois Brick to be overturned.9The Court further held that the risk of double recovery-which the majority in Illinois Brick identified as a key reason for barring indirect purchaser claims-could adequately be addressed at the trial stage. Specifically, the Court indicated that "it will be open to the defendant to bring evidence of this risk before the trial judge and ask the trial judge to modify any award of damages accordingly."10In a similar vein, the Court concluded that: (a) the trial judge retains the discretion to deny the claim if the defendant presents evidence that the court's ability to mitigate the risk of double recovery is beyond its control; and (b) if the defendant adduces evidence of parallel suits pending in other jurisdictions that would have the potential to result in double recovery, the trial judge may deny the claim altogether or modify the damage award in accordance with an award sought or granted in the other jurisdiction in order to prevent overlapping recovery."Importantly, the Court also held that classes may be composed of both direct and indirect purchasers, and that a conflict between those two groups as to how aggregate damages are to be distributed amongst them should not bar indirect purchasers from becoming members of a proposed combined class.'2III. Jurisdictional IssuesIn Sun-Rype, the respondents argued that the plaintiffs' claims failed to disclose a reasonable cause of action because, among other things, "an alleged conspiracy entered into outside Canada, among foreign defendants, to fix prices of products sold to foreign direct purchasers" lacks a real and substantial connection to Canada, and therefore does not give rise to a civil remedy under section 36 of the Competition Act}3 Although the Court agreed with the defendants that plaintiffs must demonstrate such a real and substantial connection to Canada, it disagreed with respondents' characterization of the factual situation in the case before it. …

Emerging Technology and Its Impact on Automotive Litigation

Abstract: This article originally appeared in the September 2013 Technology Committee newsletter. NEARLY 150 years ago, in Bridge Proprietors v. Hoboken Co., the U.S. Supreme Court lamented the fact that "the most remarkable invention of modern times"--the steam engine--had caused the legal system to "be met by difficulties of the greatest character." (1) The truism that law will always be outpaced by the speed of technological innovation, and the uncertainty that has always existed at the intersection of technology and the law, has been illustrated time and time again, from the age of railroads to the digital age of today. And while virtually every area of the law can provide its own examples of time-honored doctrines struggling to adapt to a world of Google, Facebook, and Twitter, the area of automotive litigation provides perhaps the best demonstration of the uneasy relationship between new technology and traditional legal concepts of duty. From ride-sharing apps and services like Uber, to the "driverless car" of the future, to black box technology and its ability to shed light on an accident, to whether the sender of a text should be held liable to third party victims struck by the recipient of that text, technology issues promise to change the legal landscape in a big way. I. Whose Ride Is It Anyway? One of the newest transportation alternatives is "ride-sharing" or "car-sharing" services, facilitated through mobile apps. Companies like Uber, RelayRides, Lyft, and Sidecar own no vehicles at all, but purport to function instead primarily as technology platforms that connect clients with drivers through a smartphone app. Riders are connected with drivers using their phones' GPS, much like a taxi company's dispatch system would send the nearest available cab. The drivers could be existing car services or even individuals. Uber, for example, stresses that it "does not provide transportation services," "is not a transportation carrier," and that the independent contractors or businesses that sign up with it are the true "transportation companies." Uber got its start connecting people to town cars provided by taxi and limo services, while others have a broader approach. RelayRides permits car owners to rent their personal vehicles to others when they're not using them, while Lyft and Sidecar both allow drivers to provide rides in their own cars to strangers. Ride-sharing has been controversial for a number of reasons. Virtually all states and major cities have different regulations for taxi services. In cities like Dallas, for example, where the taxi industry has powerful political connections, the city council mulling a strict new limousine ordinance (that was coincidentally drafted in part by a cab company attorney) and promises to crack down on ride-sharing services. (2) Cities claim that services like Uber circumvent the regulations and licensing fees that taxicab companies have to contend with. In cities like Houston and Denver, for example, Uber and other ride-sharing services have been essentially shut out by rules governing limousine services that restrict charging based on time elapsed or distance traveled; in Houston, limos must be called at least 30 minutes before they arrive and charge a minimum of $75. In California, the Public Utilities Commission reached an interim agreement to allow ride-sharing companies to operate while it weighs proposals that would make them full-fledged, legally operating "transportation network companies." This would likely involve state licensing, required criminal background checks on drivers, and mandatory insurance coverage even more stringent than that required of limo companies. Meanwhile, states like Oregon and Washington have laws that are "ride-sharing friendly." Individuals have an explicit right to legally rent out their private vehicles, and auto insurers aren't permitted to drop a policy holder just because he or she is renting out a personal vehicle (however, the ridesharing company does have to take out commercial policies covering the personal vehicles while they're in commercial use). …

A Dutch view on discovery: Short and sweet

Abstract: THE United States is internationally known as a jurisdiction with broad discovery rules that pose extensive costs on defendants. (1) Like many other continental European jurisdictions, the Netherlands does not have U.S. style discovery. Nevertheless, there are more fact-finding options available under Dutch law during and before civil proceedings than one would expect at first glance. Those options are available even when the proceedings have been or will be commenced before a foreign (non-Dutch) court. A complicating factor, however, is the fact that the available options are spread out in statutory regimes of varying nature or have been developed in the case law of the Dutch Supreme Court, the highest civil court in the Netherlands, with its seat in The Hague. The result is a patchwork of fact-finding options. The most-used "evidentiary patches" will be briefly discussed below, including their potential cross-border implications. We will discuss the relevant provisions relating to the production of documents, the pre-trial hearing of witnesses, and the Dutch so-called "inquiry proceedings," which are widely used in shareholder disputes. Those fact-finding options could be a useful tool for companies that are involved in commercial disputes and want to strengthen their settlement negotiation position, but don't want to get involved in lengthy and costly discovery proceedings. The fact-finding instruments discussed below can also be used as part of a sophisticated commercial dispute-resolution strategy. Before we zoom into three fact-finding mechanisms, a brief overview of some relevant features of the Dutch legal system will follow. I. General The Netherlands is a civil-law jurisdiction, which means that there are no jury trials, no contingency fees and no punitive damages. The Dutch judiciary is known for its competent and independent approach, a combination of common-law pragmatism with German "Grundlichkeit". Moreover, the Dutch judiciary is internationally oriented and has vast experience with complex high-profile litigation and international disputes. It is accustomed to handling disputes with cross-border implications and involving foreign parties. Although the language of the court is Dutch, the judiciary doesn't feel uncomfortable when parties submit or present documents written in English. The internationalization of the Dutch judicial system was the subject of the Dutch Supreme Court's annual report for 2009-2010. (2) Also in 2011, the President of the Supreme Court expressed in a speech that Dutch judges must take into account the international dimensions of the cases with which they are confronted. (3) The Netherlands has cost-shifting rules under which the loser pays the winner's legal fees, but the loser never fully pays the winner's real costs. The legal fees that the losing party must pay are capped and are related to the amount in dispute and the number of motions or pleadings that parties filed, rather than to the winner's actual expenditures. Furthermore, court fees for individuals and for companies differ. For example, if an amount of EUR 1,5 million is in dispute, District Court fees would be EUR 3,829 for companies and EUR 1,519 for individuals. Court of Appeal fees would be EUR 5,114 for companies and EUR 1,601 for individuals. Supreme Court fees would be EUR 6,396 for companies and EUR 1,920 for individuals. (4) The winning party will receive a cost recovery dependent on the number of procedural acts, be it motions or hearings, it performed before the court. Depending on the number of motions the parties filed, the winning party before the District Court or the Court of Appeal will receive a in a case with a value of EUR 1,5 million a cost recovery of EUR 3,211 per motion or a hearing attendance. (5) The rules in the Supreme Court are slightly different: if the ruling is quashed, the party that appealed the ruling will receive EUR 2,600. If the ruling is confirmed, the opposing party will receive EUR 2,200. …

Online Mediations: Advantages and Pitfalls of New and Evolving Technologies and Why We Should Embrace Them

Abstract: This article originally appeared in the May 2014 Alternative Dispute Resolution Committee newsletter. THE growth of the World Wide Web after 1992 and the exponential expansion of Internet usage across most sectors of modern society can best be described as a "Big Bang" in the history of technology. (1) The rise in popularity and extreme commercialization of the Internet resulted in an increased volume of online transactions, which in turn gave rise to a significant number of online disputes. Not before long, the need emerged for an alternative dispute resolution system that could provide as much efficiency and effectiveness as the new online environment required. Thus, e-commerce (2) was essentially the birthplace of what is known as a system of online dispute resolution (ODR). (3) Broadly described, ODR refers to the use of traditional mediation, negotiation, and arbitration techniques, as well as conducting formal judicial proceedings, in an online environment. (4) ODR avails itself of a wide range of tools, such as emails, instant messaging applications, highly specialized settlement software and video teleconferencing. (5) Technology mediated dispute resolution methods, which encompass all types of ODR, generally incorporate the use of advanced communication technologies, such as mobile phones, tablets or handheld computer devices, satellite transmissions, video-teleconferencing, (6) and even the use of avatars or holography to achieve the core goals of dispute resolution. (7) In fact, some scholars have made a distinction between the terms "ODR" and "technology mediated dispute resolution", in order to reflect the supplementation of Internet communications with audio, video and text capabilities. The above distinction also points out the younger generation's growing preference for the use of cellular phones, text messaging and satellite supported systems for their everyday communication. (8) Although cross-border commercial litigation was the initial arena for the origination of ODR, the application of new methods of dispute resolution has spread over many other areas of litigation. (9) There is no doubt that established and new ODR technologies represent an essential means to achieve a more cost-effective system of dispute resolution. However, some pitfalls in the ODR system have yet to be overcome. Focusing on the specific topic of online mediations, this article briefly reviews the most pressing issues for litigators to consider when deciding on whether to use online mediation resources as substitutes for face-to-face mediations in general. The article also explores alternative solutions to the most common pitfalls encountered in online mediation practice. Lasdy, this article suggest that practitioners must embrace the new technologies and communications applications currently used for online mediations in light of the fast paced growth of technology and society's increasing tendency towards becoming more technologically savvy. Common Types of Online Mediations Unlike traditional mediation, where all the parties are often physically present "at the table" from start to finish, computer-assisted. mediations are conducted with the use of computer communications to facilitate the administration of traditional mediation. In these proceedings, although the mediation may actually require a face-to-face encounter, or a telephonic conference between all parties, the initial process of mediation will require the use of computers to exchange preliminary information between the parties and the mediator. (10) A hybrid form of computer-assisted mediations can also be devised by the parties and the mediator, wherein both online and in-person mediation techniques are used to conduct the proceedings, such as when a party is present with the mediator and the other party appears remotely through a video-teleconference. In either of the above scenarios, the role of the mediator is not completely obviated by the use of electronic systems or processes inherent to computer-assisted mediations. …

Enforcement of Foreign Arbitration Awards in the United Arab Emirates

Abstract: THE United Arab Emirates ("UAE") is a federation established in 1971 of the seven Emirates of Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain. (1) Abu Dhabi is the Federal capital of the UAE. The UAE has approximately eight percent of the world's proven oil reserves and the Emirate of Abu Dhabi commands one of the wealthiest sovereign investment funds in the world. The UAE has one of the highest incomes per capita in the world. Concerns about regional security have made the UAE a major purchaser of defense technology. By one estimate, the UAE is the fourth largest importer of arms in the world. (2) Because of the UAE's very strong financial standing regionally and internationally, it has attracted businesses from around the world to do commerce there. As a necessary part of doing commerce, all parties to the transaction are served by an agreed forum to hear and resolve disputes that may arise if they cannot resolve those disputes themselves. There is a strong need for a mechanism that is governed by rules that are known and understood and that can lead to a binding and, perhaps most importantly, enforceable result. Foreign arbitration clauses are probably the most common means of achieving these ends, and contracts between foreign defense contractors and UAE counterparties, for example, often include foreign arbitration clauses. If an arbitration clause is invalid in the UAE (and enforcement abroad is not an option), the only option is to seek enforcement in the courts in the UAE. If a party has concerns about the prospect of an existing arbitration clause being deemed unenforceable, it could (i) seek to amend the clause by mutual agreement with the other party, or (ii) file suit in the local courts. I. Brief Overview of Local Court System The UAE Constitution provides for a Federal court system, but permits each Emirate to opt out of the Federal court system and maintain an independent court system. Currently, the Emirates of Ajman, Fujairah, Sharjah and Umm Al Quwain participate in the Federal court system. The Emirates of Abu Dhabi, Dubai and Ras Al Khaimah each maintain separate court systems. (3) Rules of evidence and court procedure are governed by Federal laws, which apply in all seven Emirates. The UAE is a civil law jurisdiction, and the doctrine of binding judicial precedent is not followed. (4) Court decisions are often indicative of how other courts may act in the future, but are not binding on such courts. Moreover, not all court decisions are published. There are no juries, and cases are heard by a single judge or a three-judge panel, depending on the nature of the dispute. Cases proceed on the basis of written pleadings submitted by advocates at a series of hearings conducted in Arabic. All evidence submitted to the court must be in Arabic or be translated into Arabic by a translator certified by the UAE Ministry of Justice. Laws in the UAE are made both at the Federal and individual Emirate level. The existence of different court systems means that the interpretation of UAE Federal law may vary. For example, the courts in the Emirate of Dubai may interpret UAE Federal law differently than the Federal courts or the courts in the Emirate of Abu Dhabi. II. Important Elements in any Foreign Arbitration Clause When incorporating a foreign arbitration clause into a contract, there are certain essential elements that should exist in every clause. The language of the arbitration is important. One of the reasons foreign companies want to avoid the local courts in the UAE is the fact that all proceedings there must be in Arabic. Thus, any arbitration clause should include an agreement on the language by which any arbitration will be conducted. Parties are also free to select the venue of such arbitration. Generally, the parties will agree on a venue that favours neither party; i.e. neutral territory. Recognize, however, that the parties will bear the travel expenses of the arbitrator selected by the arbitral body to hear the case in that location. …

A "Principled" Approach to Coverage? the American Law Institute and Its Principles of the Law of Liability Insurance

Abstract: THIS Spring, the American Law Institute ("ALI") will meet in Washington, D.C., to consider the latest sections of a far-reaching project entitled Principles of the Law of Liability Insurance. Although the Principles project has been in the works for nearly four years and addresses issues of profound importance to the insurance industry, policyholders, and insurance practitioners regarding the interpretation and scope of liability insurance, many insurance claims professionals, policyholders, and outside counsel know little of it. The idea for this project appears to have begun with a suggestion by Professor Kenneth Abraham, an active and influential member of ALI's Council. The ALI's Council approved the proposal for the Principles project in May 2010. Professors Thomas Baker of the University of Pennsylvania Law School and Kyle Logue of the University of Michigan Law School were appointed as the Reporters, and a team of 36 lawyers chosen from the judiciary, academia, industry (on both the insurer and policyholder sides), and active law-firm practitioners were invited to serve as the Principles project's Advisors. The group of Advisors is fixed. As with other ALI Restatement and Principles projects, the effort also includes a large "Members Consultative Group" that also has offered comments and advice as the project has progressed. Any member of the ALI can participate in the Members Consultative Group ("MCG"). The Advisors and Members Consultative Group include representatives of insurers and policyholders. The ALI creates its Restatement and Principles projects through a dialectic, involving input from Advisors and Members Consultative Group members and discussions in the ALI Council and yearly meetings of the ALI general membership, a process that takes place over (often many) years. The objective is to produce a product of broad usefulness and applicability that reflects a consensus from constituencies representing different perspectives on the subject matter in question. Unlike the more familiar ALI Restatements, which seek to summarize principles of the law where there is a general consensus, a Principles project seeks to declare what the ALI, through its deliberative process, thinks the law ought to be. As one of the Reporters has said, a Principles project seeks to set forth "best practices." In 2005, the ALI published a Handbook setting out four types of projects: Restatements, Legislative Recommendations, Principles, and Studies. It discussed both Restatements and Principles. Restatements were "clear formulations of common law and its statutory elements or variations," reflecting the law as it presently stands or as it might plausibly be stated by a court. Then there was the Principles category. This had not previously been used in ALI terminology, and had clearly been created in connection with the Corporate Governance project and its ramifications. Principles, the Handbook announced, "may be addressed to courts, legislatures, or governmental agencies. They assume the stance of expressing the law as it should be, which may or may not reflect the law as it is." (1) The Reporters for the Principles project observed in the Memorandum introducing Tentative Draft No. 1 that: Although this is a Principles project rather than a Restatement, we support many existing rules. We have attempted to provide clear articulations of and to set forth the primary justifications for those rules. In a few Sections, our statement of a rule is a bit more direct than that of the courts in at least some jurisdictions, but in each of those instances we believe that the rule we propose describes what courts actually do in a substantial number of jurisdictions. In a number of instances, however, we propose adjustments to existing rules that we believe are superior. That, of course, is the point of a Principles project. (2) At the ALI's May 2013 meeting, some members raised the issue of whether the Law of Liability Insurance project should be transformed into a Restatement. …

Mediation - What Is Still to Be Learned in Scandinavia?

Abstract: This article originally appeared in the March 2014 Alternative Dispute Resolution Committee newsletter.IN Denmark and the rest of Scandinavia, the idea of alternative dispute resolutionsuch as mediation-is still young and full of unutilized potential. Ten years have gone by since the mediator education giving lawyers the opportunity to become certified mediators was first introduced in Denmark. Therefore, it is season for a retrospect of the past decade of mediation in Scandinaviahow has the development been and where can we improve as we go forward?The Development in ScandinaviaSince 2003, Denmark has promoted a mediation education program aiming at educating lawyers to become certified mediators. Mediators are members of the organization Danish Mediation Lawyers and, with the support of the Danish Bar and Law Society, this organization established the Danish Mediation Institute with a view to offer mediation solutions in private and commercial disputes. Since 2003, mediation has also been offered by the Danish Institute of Arbitration.At the time when the education program was first introduced, no Danish lawyers were certified mediators or the like, and the number of commercial disputes settled by mediation was very limited. At that time, meditation was only used in a few family law disputes. Now, according to official sources, roughly 400 lawyers are certified mediators, and 20 disputes were settled by mediation in 2013, as compared to 15 in 2012.These are the official figures provided by the official Danish Mediation Institute. To these figures must be added an unknown number of ad hoc mediation cases which have presumably also taken place.Based on information provided by the official mediation institutes of the two other Scandinavian countries, Sweden and Norway, the situation is the same throughout the rest of Scandinavia.The figures show that development is heading in the right direction. However, as compared to, for instance, the U.S., the number of disputes settled by mediation in Scandinavia is still insignificant and disappointing.Mediation as a Cost-Saving MeansMediation is time-saving and consequently cost-saving. Obviously, no court or arbitration tribunal can compete with a time frame of three months in which most mediation cases are concluded.Contrary to litigation and arbitration, mediation implies resolving the dispute according to the interests and needs of the parties and, therefore, fundamental legal arguments, such as the liability for damages, the lack of notice or the calculation of the claim, lose the spotlight.Mediation can be seen as a compromise solution leaving no winners and no losers. However, since the unchallengeable truth is that time is money, lawyers and their clients ought to make up their minds as to whether winning a case for them means a court approval of their legal arguments or a settlement of the case with an "as much as possible outcome", which the counterparty is willing to accept.If both parties to a dispute would make up their minds on the latter-which I assume will often be the case-mediation could also be seen as leaving two winners. And by choosing mediation, the parties may, following a settlement, continue to do business with each other, which would have been completely compromised by any award or ruling.Costs are of course involved when appointing the mediators and preparing the mediation meeting, but the savings are still very significant as compared to litigation and arbitration as approximately 70% of all mediation cases results in settlements. Only the remaining 30% of all mediation cases proceed to litigation or arbitration and, even then, the case has arguably been trimmed and the essence of the dispute is clearer than before the mediation, and therefore the costs have not been futile.Difference in How We See Disputes?It gives food for thought why, after a decade with all options open for resolving disputes by mediation, we Scandinavians still lag way behind the Americans. …

Contingency Fees and Access to Justice in Australia

Abstract: IMPROVING access to justice is a perennial issue in Australia, and internationally. As an Australian jurist has noted:1At almost any given time in Australia, there is an inquiry under way into access to justice or consideration is being given to the latest report on the subject.Budgetary constraints in most developed countries have led, in recent years, to the issue becoming more controversial and the subject of broader community debate. In February 2013, a Victoria Supreme Court Judge, Lex Lasry, took the highly unusual step of staying a trial for attempted murder following the decision by Victoria Legal Aid to provide only a barrister, and not a solicitor, to the defendant. The funding body took the step in response to what it considered to be chronically inadequate government funding.2 In May of 2013, the Victorian Office of Public Prosecutions was aware of fortyseven applications for stays in other criminal proceedings that had already been made or were being made on the basis of inadequate funding of the defense.3Victoria Legal Aid prioritizes funding criminal proceedings,4 and so difficulties in the civil arena may be considered even greater. In response to those difficulties, the Australian Productivity Commission was recently asked by the Commonwealth to enquire into how access to justice may be improved in civil matters and has received more than eighty submissions in response to its issues paper released in September 2013.5 A submission on behalf of one of Australia's largest plaintiff law firms, Maurice Blackburn, suggested that "Allowing lawyers to charge contingency fees would substantially improve access to justice."6 This is not the first time such a change has been proposed, but we suggest that it is unlikely to enhance access to justice significantly in Australia and carries risks that far outweigh any possible benefit.I. Arguments in Favor of the ProposalLaws in every Australian State and Territory prohibit lawyers from entering into costs agreements which provide for the payment of a contingency fee-that is, a fee calculated by reference to the amount of any award or settlement or the value of any property that may be recovered in any proceeding to which the fee relates. Proponents have suggested recently that the existing prohibition on contingency fees be lifted. Advocates for this proposal tend to rely on three arguments, namely:* contingency fees will improve access to justice;* in the context of other possible funding arrangements, and changes in other jurisdictions, the prohibition can no longer be justified; and* contingency fees provide greater certainty, clarity and proportionality than other fee structures.We address each argument in turn and then discuss the significant risks lifting the prohibition would entail.A. Access to JusticeProponents often assert that allowing lawyers to enter into contingency fee agreements would provide potential litigants with an additional source of funding and, in doing so, promote access to justice for persons otherwise unable to afford legal representation. It is not clear to us, however, that contingency fees are capable of addressing the areas in which there is greatest unmet legal need.In 2012, the Law and Justice Foundation of New South Wales conducted a survey aimed to identify the prevalence of all types of legal problems in Australia (the LAW Survey)? According to the LAW Survey, the most common legal problems are consumer, crime, housing and government problems.7 8 These are also the most common legal problems for which people do not seek legal advice.9 By contrast, the legal problems for which people most often seek legal advice are family law, personal injury and money problems.10In our view, the unmet legal need identified by the LAW Survey is unlikely to be addressed by allowing lawyers to enter contingency fee agreements. Criminal law matters are generally (and correctly, in our view) excluded from any proposal to allow lawyers to charge contingency fees. …

Surprise! How Can Insights from Other High-pressure Occupations Help Legal Professionals Better Handle Unexpected Events?

Abstract: MIKE Wheaton knows about surprise. (1) As a coach in the National Football League (NFL) for more than 20 years, Wheaton is one of the longest-serving coaches in the franchise's history. For a profession that is known for being short-lived, Wheaton's longevity is a testament to his effective mastery of the job and, in particular, in dealing with surprises. (2) When I called Wheaton to discuss his approach to dealing with surprise, he stated his position clearly: "If I'm doing my job right, there should never be any surprises." He went on to describe that his preparations begin in the off-season, when the coaching staff receives the team's schedule for the upcoming year. Once the preseason begins, Wheaton and his fellow coaches start reviewing hours of videotape and thousands of photographs from previous games. Wheaton's goal is to determine how his opponents think and behave in every situation. The output of all of this research is the team's playbook, which provides the coaching staff with a detailed list of "what if' plans for any situation they might find themselves in. His team's playbook is so specific that the coaches can input the down number, the team's position on the field, and the opposing team's formation, and the playbook will recommend the best course of action. Wheaton, therefore, prepares for surprise by thinking about every possible scenario that can happen to his team, and then generating a playbook as a way to eliminate foreseeable chances that he will be surprised. But what about practitioners who do not possess the luxury of a planning season and reams of historical performance data? After speaking with Wheaton, my conversations turned to former Navy Sea, Air, Land (SEAL) platoon commander Chris Bradford. At first glance, it would seem that Bradford could appreciate Wheaton's approach to dealing with surprise; before serving as a SEAL platoon commander, Bradford wrote his master's thesis on what the Navy can learn from the NFL. Similarly, Wheaton spends his off-season reading military doctrine because, he says, it makes him a better strategist on the field. (The two men have never met.) I led my interview with Bradford by asking if he, like Wheaton, prepares detailed plans for all of his missions. Surprisingly, Bradford said, "I need my guys to have clear heads on the ground, otherwise they're going to make mistakes. The last thing I want is to be worrying about all of the countless things that could go wrong and cramming plans into their heads at the last minute." Bradford went on to describe his preparation process. Instead of reviewing every possible scenario and devising a plan against it, Bradford limits his scope to the key parameters particular to the upcoming mission: What is the mission goal? What is the route to the target? What are the primary threats that the team is likely to face? To address these, Bradford and his team review aerial photos, identify key landmarks, and discuss ingress and egress strategies. They may notionally walk through the mission before going out into the field, but Bradford notes that there is no such thing as a playbook for his SEALs. The differences between the two approaches are striking for two reasons. First, Bradford and Wheaton clearly see their professions as analogs of one another, as evidenced by the fact that they each spend time researching the other profession's strategies. Yet, they maintain completely opposite approaches to dealing with unexpected scenarios: Wheaton thinks about everything that could possibly go wrong, while Bradford tries to stay focused on the bigger picture, despite the fact that Bradford faces an existential threat every time he goes to work. Why would the SEALs--individuals who risk their lives on every mission--have far fewer "what if' plans than football players? To address this and other surprise-related questions, my colleague Steven D. Fox and I interviewed a number of highly successful professionals to find out what they believe creates surprise, how they prepare and respond to it, and how the negative effects of surprise can be mitigated. …

Collateral Estoppel in Attorney Disciplinary Proceedings: A Hobson's Choice

Abstract: During the course of a civil proceeding, the court often makes findings of misconduct on the part of counsel. The court may find that a lawsuit is frivolous, that a conflict of interest existed, or that there was a breach of good faith or fiduciary duty (1) while representing the client. (2) At this point, attorneys may be sanctioned or even removed from the case (3) and the client often retains new counsel. In this situation, there is typically no means to challenge or appeal the finding of misconduct until the trial ends (4) and there is a final judgment. (5) In this scenario, the client has no financial or strategic interest to appeal the finding of misconduct because new counsel has been retained or an appeal may disadvantage the client. (6) Out of loyalty to the client, (7) counsel often elects not to exercise his or her right to appeal the finding of misconduct, essentially creating a final judgment on the issue. Yet by declining to take the appeal, counsel may lose its opportunity to litigate the adverse misconduct finding in the first place. This decision may create a binding collateral estoppel effect, which would preclude counsel from relitigating the issue. (8) Such a result would deny counsel a true full and fair opportunity to be heard regarding the finding, even though all of the requirements of collateral estoppel have not been met. (9) In this kind of situation, courts addressing this issue have not considered otherwise valid reasons or considerations for the attorney's decision not to exercise his right to appeal when applying collateral estoppel. Courts have generally found that the existence of a full and fair opportunity for the attorney to appeal satisfies the requirements for collateral estoppel to apply. (10) In instances where counsel did not have an opportunity to fully litigate the finding of misconduct before the court, collateral estoppel should not be applied. (11) Because counsel did not have a full and fair opportunity, it is questionable whether the issue of misconduct was fully before the court; these two requirements of collateral estoppel are closely related. Identity of issue and a full and fair opportunity to be heard on that issue are two closely related requirements of collateral estoppel. (12) In the middle of a sanctions case, counsel may not be prepared to explain to the court why the attorney acted in a particular manner that resulted in a finding of sanctions. (13) Or, concerns of harming the client may have led counsel to not fully litigate the issue, despite the harm to himself. (14) In this situation, counsel is faced with a Hobson's choice: (15) owing professional duties to his or her client, counsel had no free choice to appeal the finding of sanctions. The attorney must accept the sanctions imposed upon him. This article argues that courts should develop an exception to the doctrine of collateral estoppel in attorney disciplinary proceedings to allow the attorney to have a full and fair opportunity to be heard. The limited number of published decisions in the current case law illustrates the problem that attorneys face in the application of collateral estoppel to findings of misconduct. (16) Although most attorney disciplinary proceedings are private (17) and little has been written on the subject, practitioners face this issue on a regular basis. (18) This article begins by providing background on the doctrine of collateral estoppel, the requirement of a full and fair opportunity to challenge the judgment of the civil action, and the procedural aspects of attorney disciplinary proceedings relating to the application of collateral estoppel, including reciprocal disciplinary proceedings. This article then analyzes the problems faced by counsel in attorney disciplinary proceedings with consideration of disciplinary proceedings of other licensed professionals, illustrating that the unfettered use of collateral estoppel in attorney disciplinary proceedings contains too great a risk of "unfairly imposed discipline" in contrast to the small amount of economy gained. …

The Teacher Becomes Student: What Law Professors Can Learn from the Legal Profession

Abstract: FOR more than a century, the dominant mode of pedagogy in American law schools has been the Socratic method, first introduced by Dean Christopher Columbus Langdell of Harvard Law School in the late 1800's. As long as the primary goal of law schools was to train students to "think like a lawyer," the dialogue-based Socratic method has served law schools fairly well.In recent years, however, law schools have faced increasing pressure to train students not only to think like lawyers but to behave and perform like lawyers. Particularly since the recession, clients have become increasingly unwilling to pay the hourly rates of recent law school graduates who often knew little about practice and were effectively being trained on the job. Legal employers, in turn, have become more reluctant to hire associates without experience. This has left new lawyers in classic "Catch-22," and has put pressure on law schools to make students more practice-ready upon graduation, as well as offer post-graduate programs such as incubators, residencies, and fellowships to ease graduates' transition into the employment market.But the calls for reform in legal education long pre-date the recession. In 1992, the ABA's "MacCrate Report"1 made a variety of recommendations for "narrowing the gap" between law schools and the profession. And in 2007, two influential reports-commonly referred to as the "Carnegie Report"2 and "Best Practices"3-exhorted law professors to infuse their teaching with practical skills and professionalism.In order to serve the needs of the next generation of law students as well as the changing needs of the legal profession, law schools must strengthen their ties to the practicing bar. And law school faculties, in turn, must strengthen their ties to practice. My own foray back into practice proved to be extremely beneficial; but it remains, unfortunately, an anomaly.I. The Limited Practice-Oriented Focus Among Law ProfessorsAlthough some institutions have embraced reform, law schools as a whole have been slow to change. This is due in part to the ostensible tension between a focus on "practice" and "research":Like all professional schools, law schools are hybrid institutions. One parent is the historic community of practitioners, deeply immersed in the common law and carrying on traditional of craft, judgment, and public responsibility. The other heritage is that of the modern research university... [A]s American law schools have developed, their academic genes have become dominant.4Numerous lawyers and judges have criticized legal scholarship for becoming increasingly abstract and irrelevant to the modern practitioner.5 And survey evidence shows that law students want professors' teaching geared toward the realities of practice, and that practicing attorneys regret that they did not get better training in these areas while in law school.6To some extent, law schools can rely on part-time adjuncts or visitors to provide practical training and assign their full-time tenure-track faculty to traditional doctrinal courses. But the Carnegie Report rejects this division and urges schools to adopt an approach that integrates "each aspect of the legal apprenticeship-the cognitive, the practical and the ethical-social."7The notion of an "apprenticeship" implies the presence of a master or expert to which one can be an apprentice. Not surprisingly, the reform literature has widely acknowledged that law professors can and should serve as models of competent and ethical lawyering.8The problem is, not only do most law professors not practice law, but many have not done so in a long time, if ever;9 they did so under fairly homogenous condi- tions-no more than several years doing mostly research and writing at a large firm;10 and they often did not particularly enjoy the experience (or else they would not have left practice to teach).11 Indeed, the current trend is to hire law professors with less practical experience than ever before. …

Understanding International Labor And Employment Policy: A Primer For Multinational Employer Operating In A Global Economy (Japan)

Abstract: FOREIGN companies hiring personnel in Japan may soon come to realize that many of their beliefs about Japanese employees do not exist. There is a stereotype that Japanese are non-litigious. This stereotype is inapplicable when it comes to employees asserting their legal rights in the workplace. As "at will" employment is not recognized in Japan, hiring the right employees is a key concern of employers. This paper will briefly discuss certain matters that employers need to consider when hiring a Japanese workforce. In Part I, we will give a brief introduction on how wage and discrimination claims are handled in the absence of class action lawsuits. Part II addresses the changing role of unions in Japan, including recent trends. Part III discusses the impact of social media in the work force and ways in which Japanese employers are addressing social media and privacy issues in the workplace. I. Wage and Discrimination Claims in Japan A. Labor Dispute Methods I. Class Action Lawsuits In Japan, class action lawsuits do not exist for group proceedings. Rather, group proceedings are required to be maintained on procedural methods that are accepted for normal litigation. A common method is joinder of claims, and a rarely used method is representative actions. (1) Joinder of claims is a procedure for consolidation of litigation between several parties into one single action, and parties are joined as a result of the intentions of the plaintiffs or the court. In particular, if rights or obligations that are the subject matter of the suits are common to two or more persons or are based on the same factual or statutory cause, these persons may sue or be sued as co-parties. The same shall apply where rights or obligations that are the subject matter of the suits are of the same kind and based on the same kind of causes in fact or by law. (2) Normally, this procedure is used for joining actions with a relative small number of parties such as, for example, the joining of two or more joint debtors. The benefit is to have one uniform judgment for similar types of cases, especially since the litigation proceedings are not separate litigations in practice, but are cases where a few lawyers are jointly retained to handle the proceedings. The weaknesses of joinder are that the group characteristic of this kind of procedure is only de facto and the court will have ultimate discretion to allow or deny it. For example, where evidence among the plaintiffs is different, the court can resolve them in separate litigation proceedings. Further, each party in principle is free to settle, and there are no particular restrictions preventing a party from withdrawing its claims. When this procedure is adopted, the lawyers retained in the litigation must obtain authorization from each individual party. 2. Civil Litigation or Labor Mediation A civil lawsuit is one method to resolve individual labor disputes. In general, a dismissed employee initiates a legal action against his or her employer, raises certain claims for damages or remedies available under the laws and seeks a "provisional disposition order" to preserve his or her employment status (chii-hozen karishobun). A provisional disposition order is similar in effect to a preliminary injunction. Japanese courts nearly always grant this type of provisional disposition order and as a lawsuit may not be resolved for months or years, the employer could be required to continue paying an unwanted employee a salary with little economic recourse for repayment even if the employer ultimately prevails. In 2001, an extra-judicial procedure to assist resolution of individual labor disputes was introduced under the Law on Promoting Resolution of Individual Labor Disputes. Under this law, both parties to a labor dispute can consult with a regional office of Labor Bureau, and the Labor Bureau may give its advice or instruction to facilitate dispute resolution between the parties or arrange for a conciliation proceeding as necessary. …