Page 17 - CCCA 239285 Magazine_Fall 2015

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” “Claims features heavily in our service

offering,” he explains. His frm defnes a
major dispute as $1 million or more, at
which point the process kicks in. It in- sTacking uP To LiTigaTion
volves an early case assessment to evalu- Why worry about litigation? Because it’s expensive.
ate the strength of the claim. “We spend According to the 2015 Norton Rose Fulbright global
money at the earliest practical point litigation trends survey, companies are spending
Steve Richards, GC, to get what we think is a true read as hundreds of millions of dollars annually fghting and
PCL Constructors Inc.
to the strength of our claim [case]. pursuing lawsuits. The median litigation spending
We’re the quickest out the door to get an budget (excluding settlement and judgment costs) is
opinion on whether we have a winning hand.” US$1.2 million globally.
Depending on that assessment, it can lead to a quick attempt to
settle or a more drawn out affair ending up in court. Canada often stacks up with australia in terms of its
Metrics and numbers play an important role in Richards’ litigation trends. In Canada, 62% of companies report
preventive litigation tool box. The company maintains a train- spending less than uS$500,000 annually on litigation,
ing service where lawyers educate staff on the 100-year-old almost the same as australia. Only 21% of u.S. survey
company’s claims history. That includes tracing payout ratios, participants report spending that little.
which help form a benchmark for measuring the success of his about 4% of Canadian respondents say their organization
litigation program. spends between $500,000 and uS$1 million, while 15%
It’s an employee-owned company, he says, so when he talks spend between uS$1 and uS$5 million. about 9% spend
about keeping payout ratios low, people listen. The underlying between uS$5 and uS$10 million. a further 11% report
philosophy to his program: “We are a construction company. spending uS$10 million or more.
We are not in the claims business.”
not surprisingly, the more the revenue, the greater the
aLTernaTive disPuTe resoLuTion litigation spend. about 32% of global companies with
In addition to implementing arbitration processes to settle cases revenue exceeding uS$1 billion spend more than uS$10
early, companies also need to consider mediation. Richards says million on litigation.
mediation had fallen out of favour. However, in the last fve years Companies, however, seem optimistic that they’ve
he has changed his tune, and has had some recent success with it.
Some mediators, he fnds, are too busy and are simply “ask- climbed a lawsuit peak, as 73% report they expect their
ing people to play fair in the sandbox.” litigation spending to remain the same or decrease. Of
One mediator he favours is noted dispute resolution expert the 25% which expect litigation spending to increase, it’s
George Adams. “He’s even handed and has the force of person- because their business is growing or they are aware of
ality. He talks about what is your vomit number.” disputes that are likely to emerge. The reasons cited for
a decrease include better prevention and the expectation
PosT MorTeMs that existing cases will resolve.
Lawyers say one of the most important things a company can When it comes to litigation trends and concerns, most
do when facing a dispute is a post mortem of how it was han- organizations cited class actions as one of their biggest
dled and the results. worries, including Canadian respondents. Changing
“We have a pretty formalized ‘lessons learned’ culture,” says legislation and court rulings was also noted by Canadian
Richards. respondents.
RBC’s Jimdar said disputes often stem from poor commu-
nications and it’s important to correct the record before people Interestingly, when it comes to hiring in-
become “entrenched” in their positions. She said it’s about “cre- house litigators, Canada’s ranks are
ating a culture of open communications, integrity and respect.” thin. The average number of in-house
“From a corporate point of view, we don’t want to be in disputes lawyers was 16, compared
court. We would rather not be there, but run our operation in a with 4 in Canada. australia averaged
way that prevents lawsuits from happening.” ❚ almost 9. It might be time for Canadian
GCs to look at adding bodies when it comes
to managing litigation.
Jim Middlemiss is a writer based in London, Ontario.

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