Managing litigation risk, Part 3: managing litigation and regulatory action

By Scott Crabb

08 Jun 2017

Practical steps can help your businesses to manage litigation and regulatory action.

Despite doing your best, you may find that you cannot prevent a dispute from escalating and your business is now involved in litigation or regulatory action. What then can be done to ensure that the process runs as smoothly as possible?

Legal representation

Problem: You don't know how to get the right legal representation.

What you need to do

Choosing the right litigator is important. Obviously you want somebody with relevant experience but that is not all.

What you need is a lawyer who will provide an honest assessment of the strengths and weaknesses of your position. Don't look for somebody who will simply validate your opinions. This does not add value. Look for a litigator who will give you a warts-and-all assessment and formulate a coherent and proactive strategy.

Pick somebody who focuses on ADR to ensure that, where possible, your dispute can be resolved without a formal determination.

And look for a litigator who is committed to containing costs. 

Early legal assessment

Problem: You're not sure where your business stands.

What you need to do

Get an early legal assessment. It helps nobody if your expectations about what is likely to happen are unrealistic. Your litigator may not be able to provide an opinion with certainty, especially at an early stage. However, an experienced litigator should be able to provide you with sufficient guidance on potential outcomes to enable informed decisions to be made. 

Briefing the litigator

Problem: You're worried about the cost of finding out where you stand.

What you need to do

Review the terms of insurance policies and consider whether litigation defence costs are covered. Notify the insurer early.

Investigate the dispute and provide a good briefing to your litigator. This should save money and ensure that your litigator can give the most accurate assessment and formulate the best strategy.

Outline your objectives and priorities and, if possible, identify acceptable business outcomes. Point out any perceived weaknesses in the position of your business and any personality or other impediments preventing resolution of the dispute.

Summarise any discussions which have taken place with other parties or regulators. If relevant, provide some background about the competitive and political environment of your business. 


Problem: The evidence you need is no longer available or accessible.

What you need to do

Update your document management system to ensure that information is retained for appropriate periods and is readily accessible when needed.

Familiarise yourself with the rules requiring preservation of evidence, creating records of unprivileged communications and loss of privilege. Train your key staff on what is required.

Assess the key aspects of the litigation or regulatory action early, including identification of witnesses and records.

Make sure that physical and digital documents are preserved.

Take statements from key witnesses while their memories are fresh and they are available. 

Project management

Problem: You're not sure how to manage the litigation or regulatory action effectively.

What you need to do

Most litigation will be a major project which can and should be project managed. Create a project team that includes key stakeholders.

Retain experts, media consultants and preferred barristers early. Formulate a cohesive legal strategy and then continually review and revise.

Adopt processes for managing internal and external communications. Ensure that your litigator knows what reports you need for internal requirements and to update your senior management and board.

Monitor reports, costs against budget and the timetable. Inquire as to the purpose of recommended procedural steps and how they fit into the overall strategy. 

Bringing it all together

Problem: You don't know what to expect.

What you need to do

Be realistic. Even when managed effectively and professionally, litigation or regulatory action is likely to be time-consuming, distracting and disruptive to your business.

Recognise the tension between a desire to minimise costs and the need to undertake tasks needed for your business to handle the litigation or regulatory action successfully.

Be aware that litigation or regulatory action is combative in nature. However, don't be drawn into obstructive or aggressive tactics. A strong but principled response is likely to be cheaper and should not create impediments to settlement.

Keep negotiating and be prepared to mediate. Give your litigator a mandate to identify and suggest potential solutions.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.