Ben Bruton: 'One particularly uplifting trend is the emphasis placed on proactive, constructive engagement between contractual counterparties'
Ben Bruton reflects on how general counsel are responding to the Covid-19 pandemic
Since the Covid-19 pandemic was declared in March 2020, its effects have been felt across almost every sector.
In many organisations, in-house lawyers have been placed under unprecedented pressure as businesses have sought guidance on a whole range of legal issues, and short to long term risk mitigation strategies.
Based on our discussions with our general counsel clients, since governments globally imposed varying lockdown obligations, and also from our own perspective and work as a law firm, a number of trends are emerging.
Logistically, in-house teams appear to have adapted to the new way of working extremely well. For many years, in-house lawyers have been challenged to 'do more with less'. Remote management of teams, video-conferencing and effective communication across jurisdictions have become well entrenched as working practices.
Senior corporate counsel have made a real focus in checking in on colleagues and supporting each other, recognising that the circumstances of remote working, and the challenges it may bring, will vary significantly. Without such active inquiry, many of those challenges may go unnoticed by team leaders.
Many of the general counsel we spoke to had guided their businesses through the 2008 financial crisis. Similar to 2008, the pandemic has caused financial instability and market upset which has led to defaults in a variety of contractual and payment obligations and, in some cases, litigation.
However, the 2008 financial crisis was triggered by different causes; illiquidity and deficiencies in the global financial system itself. While some effects are similar, in litigation terms, the pandemic and the crisis are so different in their causes, effect, and nature, that comparisons are less useful.
The volume and nature of disputes arising from the pandemic will be affected significantly by the courts, and the approach they take to developing claims across major common law jurisdictions.
Given the serious humanitarian aspects of the pandemic, where scope for judicial discretion allows, the courts are likely to be particularly intolerant of claimant opportunism.
Third party litigation funding was a well-established feature before the pandemic. However, general counsel interest in funding has certainly increased since the onset of the pandemic as businesses exercise caution around balance sheets.
With substantial funds available for deployment, interest rates at sustained record low levels, litigation funding — as an investment — has become attractive, even to conservative institutional investors.
One particularly uplifting trend is the emphasis placed on proactive, constructive engagement between contractual counterparties, sometimes going well beyond contractual obligations to protect the integrity of supply chains.
While preferable to adversarial litigation, experienced general counsel are also identifying disagreements that may potentially develop into formal disputes.
By proactively preparing to strengthen their platform from which to subsequently litigate successfully, they are also consulting their lawyers; this is one of the key areas in which we have also been advising.
In-house teams across all sectors are under significant pressure. However, our insights with corporate counsel tell us clearly that the value of the contribution they make, as perceived by their businesses, also appears to be at an unprecedented high.
Ben Bruton is a partner in Winston & Strawn’s London office specialising in dispute resolution and investigations
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