Civil Justice Playbook: The World Tour

Tuesday, July 5, 2016 - 11:33
What does the typical civil justice system look like across the world’s 196 countries (195 if you omit Taiwan)? We can get a decent idea by drawing from a reference guide to international litigation procedures developed by the foundation of the International Association of Defense Counsel (IADC). The typical country is a civil-code jurisdiction that favors and enforces arbitration and manages to get by without juries or prehearing fact discovery. Loser pays the costs associated with civil litigation, and privilege is safeguarded, though not as jealously as in the United States. Punitive damages are, if not out and out verboten, rarely awarded, and when they are levied, they are nothing any self-respecting Texas trial lawyer would write home about. Contingency fees are permitted – grudgingly – and third-party funding of litigation is allowed. While class and collective actions were once all but unheard of, they are now very much in the mix, especially for environmental and consumer matters. And the playing field between plaintiffs and defendants is perceived as absolutely level.

The guide, which was developed by soliciting input from IADC members around the world, is chockablock with useful information and assorted oddities about key aspects of the international litigation system. It can be found on the IADC website, and is the handiwork of IADC board member Gordon McKee, a partner with Blake, Cassels & Graydon in Toronto and one of Canada’s leading class action litigators. McKee, who is quick to heap praise on the local IADC members who did the heavy lifting on the guide, says the goal was to provide a “useful tool” to help corporate counsel, businesspeople and insurance executives. “These are broad, general questions with fairly concise answers, and they’re going to need to consult a local lawyer,” McKee told MCC in a telephone interview, “but we thought it would be a good primer that would help them communicate effectively from the outset with local counsel.”

For those unfamiliar with IADC, it was created in 1920 by a group of general counsel, who called it the General Counsels’ Association of the United States. It morphed eight years later into the International Association of Insurance Counsel and has continued to grow by inviting leading lawyers and insurance executives to join. As more and more companies took to self-insuring, the membership increasingly represented companies directly, motivating another name change to the current International Association of Defense Counsel.

IADC recently released an updated version of the litigation guide, and Civil Justice Playbook dove in to the jurisdiction-by-jurisdiction responses to the 42 questions answered by the IADC members who contributed. This is some of what we found.

The guide is dominated by civil-code jurisdictions, with a mere handful of common-law countries in the mix. Most interesting are the hybrids. Of course, there is Canada, where the provinces follow the common law except for Quebec, which applies French civil law to matters concerning property and civil rights. The Philippines, usually seen as a civil-law jurisdiction, also has many statutes that embody common-law principles. As a justice of the Philippines Supreme Court described it, “[T]here is in the [Philippines] a unique legal system in which two great streams of the law – the civil law, the legacy of Rome to Spain, coming from the West, and the common, the inheritance of the United States from Great Britain, amplified by American written law, coming from the West – have met and blended.” Not to be outdone, in Saudi Arabia three systems meet: sharia, derived from the Koran; codified civil law; and various attributes of common-law jurisdictions.

The guide reveals that juries are not widely favored (except in criminal cases), but arbitration and mediation are. Elected judges are a rarity, with many jurisdictions employing a highly trained judicial elite. New Zealand is interesting in that juries are not prohibited, but practically all civil cases nevertheless are handled by a judge, except defamation cases. In Vietnam, “people’s jurors” are used, but participation is limited to first-instance civil court hearings, with appellate hearings conducted by judges only.

Discovery is all over the map (so to speak). More than half of the 49 jurisdictions have no process for prehearing fact discovery. Not to pick on Vietnam, but it is indicative of how this plays out in a number of jurisdictions. The parties there are required to provide evidence to the court to prove that their requests are well grounded and lawful. They are not, however, obligated to hand over relevant documents to opposing counsel and must “bear the consequences” for any failure to disclose appropriate evidence. All parties can read, copy or otherwise examine anything handed over to the court. (If that’s not prehearing fact discovery, it’s pretty close.)

Only three jurisdictions in the guide fail to recognize and protect, to one degree or another, privilege, which is not nearly as elaborate in other parts of the world as it is in the United States. Take Greece, for example. The common-law concept of privilege is not embedded in Greek civil procedure, but production and inspection of certain classes of documents may be restrained in ways that feel much the same, such as under the Lawyers Code or on public policy grounds. In Switzerland, privilege (“attorney secrecy”) is protected, but with no Swiss discovery it triggers few issues. In-house counsel, however, may not invoke privilege related to attorney secrecy.

Even where they are not out-and-out prohibited, punitive damages are not widely used. Malaysia, for example, allows judges to levy punitive damages, but they rarely do so, seemingly reluctant to wield their power to “punish defendants for high-handed and oppressive behavior.” In Taiwan, punitive damages are available in select areas, including intentional IP infringement. And in Thailand, they are doled out in measured doses in consumer protection cases (5x actual damages), trade secret and product liability cases (2x actuals), and discriminatory treatment of the disabled cases (4x).

When it comes to costs, loser pays (or, as they say in Italy, “the cost follows the event”) is the prevailing ethos. In Turkey, loser pays court fees and expenses, plus attorneys fees calculated by the court on the basis of the “Minimum Attorneyship Fee Tariff announced by the President of the Union of Turkish Bar Associations.”

Fewer than half the jurisdictions in the guide allow for contingency fees, and those that do tend to ladle on a thick sauce of restrictions and exceptions. In Denmark, for example, fees based on a fixed percentage of the judgment are not allowed, but the judgment can be taken into account in fee agreements, and “no cure–no pay” terms (also known as “no win–no fee”) are allowed. In Sweden, while there are no legal restrictions on contingency fees, the Swedish Bar Association generally prohibits them except – there are a lot of “excepts” when it comes to contingency fees – in class actions. “In such cases,” the guide says, “the attorney may share the risk of litigation by means of risk agreements with the group representative.”Speaking of class actions, the tide is clearly rising around the globe, as U.S.-style actions (with lots of “buts” and “excepts”) catch hold. In a number of jurisdictions, they are limited to consumer claims, and in France, where the law took effect two years ago, they can only be filed by consumer associations. Our personal favorite is Uruguay. “Class actions are not contemplated in our jurisdiction,” the guide says. “Nevertheless, a group of people can file together an action against the same defendant if the cause of action is the same.” A rose by any other name …

Last, but by no means least, is the money question posed in the IADC survey: “Are there any significant areas in which you believe the playing field between plaintiff and defendant is not level that you think need to be addressed?” Almost every response was the same: a terse “no.” Could it be that level playing fields abound from the pampas of Argentina to the paddies of Vietnam (neither Zambia nor Zimbabwe participated). IADC’s McKee found the results enlightening.

“This project has impressed me by the diversity of not only our membership but also the legal systems in which our members operate, “ he said. “As North Americans, we tend to think that we’ve got the only method. Clearly, there is more than one way to deliver civil justice.”