The “New Normal” Approaches to Litigation

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Over the past (nearly) three years, challenges associated with the COVID-19 pandemic required litigators to adapt our approach.  Success in litigation has required most firms to largely come to grips with the new normal of remote and hybrid working.

Remote hearings (and depositions) are here to stay:

The Covid-19 pandemic temporarily threw the legal system into disarray, with a great deal of uncertainty about how courts and the profession would adapt. This gave birth to remote the hearing. While not without their challenges (occasional buffering or “technical difficulties”), remote hearings are here to stay. Trials are returning to in-person arrangements where possible, the courts’ (impressive) adaption to the new ways of working is likely to survive, resulting in procedural changes and shorter hearings (or at least reduced travel time) in the future. The courts are busier than ever, and the experience during the past 2.5 years has shown us all how remote hearings can work well and cut out wasted time – (traffic, parking, elevators, security stations, etc.)  Focusing on best practices for remote hearings will be time well spent.

With the Courts having been (mostly) shut down during the first several months of the pandemic and operating far under capacity for nearly a year afterward, there is a considerable amount of backlog.  Cases going to trial now under ordinary circumstances would have been tried during the early to middle part of last year.  That logjam will not clear any time soon.  Expect delays in obtaining hearing dates, trial dates, and resolution of your cases.  As a rule, if you had become accustomed to a timetable prior to the pandemic, multiply it by 1.8, and you will have a reasonable timing estimate.

Litigation Funding:

The litigation funding landscape has changed dramatically over the last 5 years, with third-party funders and ATE insurance providers seeing increased demand from parties looking at alternative ways to finance claims.  Litigants (and their counsel) who could not afford to pursue claims are now “mortgaging” the anticipated result of their cases.  Doing so allows them to ‘remain in the fight’ far longer and has somewhat eliminated the ability of insurers or defendants with means to negotiate lower settlement amounts simply because the Plaintiffs were “starving.”  Funding is fundamental to bringing class or group claims and is essential for that regime to flourish. Funded group claims for data breach, securities, professional negligence, and environmental claims are also on the rise.

An upcoming insolvency tsunami?

During the early months of the Covid-19 pandemic, things looked particularly bleak, and many predicted an insolvency tsunami. The government took action to prevent immediate financial crisis.  However, are we left with a painfully large number of companies with problems to solve?  Have their COVID loans exacerbated their problems?  Some of them will not be able to survive and will liquidate. Some will have viable businesses but are overburdened by accumulated Covid-19 and historical debt and will restructure. Insolvencies will undoubtedly increase but restructuring solutions, both novel and tested, will be put to good use.

Trending up:

  • Environmental, social, and governance (ESG) litigation – The number of climate-related litigation claims rises year on year, with claimants seeking ever-innovative ways to use legal action as a tool to pressure governments, companies, and investors to take more action to tackle climate change. Climate change-related disclosure has remained high on the regulatory agenda – so what will 2023 bring?  Expect the level of awareness of, and responsiveness to, ESG factors (and climate change in particular) to continue to increase. Yet, it remains to be seen how and when this will translate to climate change-related litigation. An increasing number of claims worldwide have been founded on allegations of inadequate (climate change-related) disclosures causing investor loss. There remain real practical difficulties in this sort of action – but that is not likely to deter claimants in what is likely to continue to be seen as a fertile ground for establishing climate-related liability.
  • Cybersecurity and data protection – Data breach-related claims have increased dramatically. We have witnessed a growing body of claimant law firms jumping on the bandwagon seeking “loss of control” claims for their clients’ data following a data breach, even if they cannot point to having suffered any financial loss or distress. We expect data breach litigation to increase.
  • Diversity, equity, and inclusion litigation
  • Regulatory investigations
  • Class actions – Certain international less restrictive approaches to the certification of collective actions and emphasis that the test was one relative suitability, namely whether collective proceedings are suitable relative to individual proceedings, have made collecting a class convenient. Difficulties around availability and complexity of data should not preclude a very wide class of claimants with a reasonable prospect of showing they suffered loss from seeking to do so.
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