The final phase of a project is usually referred to as the “close out”. A key activity during this phase is reviewing the project as a whole and considering the lessons learned. The project team looks at what went well and what did not, identifies the processes or other factors contributing to that positive or negative outcome, and considers whether those insights can be transferred to other projects. The objective is to learn, not find fault.
All too often in the class action context, the “close out” is ignored, put off to another day or (worse) considered unnecessary. Sometimes this is because organizations consider the class action to be a “one-off” event, unlikely to happen again and/or a vestige of former management. Or it may be because management is simply happy to see it (and the memory of it) fade in the rear-view mirror. However, this can be short-sighted and wastes a great opportunity for organizational improvement. Once a class action is disposed of, either by settlement or a final decision, there can be considerable value in capturing any lessons learned. It is also a chance to consider litigation preparedness more generally.
Lessons for the Organization
The lessons that can be learned from a class action include but are far from limited to legal lessons:
- Legal – Did the claim arise from the organization’s contracts or other dealings with customers, suppliers, contractors, etc.? Could legal review processes for contracts or significant communications be introduced or improved to mitigate legal risk?
- Business Processes – Were deficiencies in business processes implicated in the class action? How could those business processes be improved? Could the class action have been prevented or mitigated if developing issues had been escalated to senior management sooner? Were there organizational or other barriers that hindered or prevented escalation?
- Compliance – Was the root cause of the class action a lack of compliance? Could audit or compliance programs be introduced or improved to identify and mitigate systemic risks sooner?
- Stakeholder Relations – To what extent was the class action attributable to relations with a key stakeholder group, such as customers or employees? How could the organization improve its processes for dealing with customers or other stakeholders?
- Financial – How close to budget was the final litigation cost? What led to litigation cost savings/overruns? Was any settlement or adverse judgment within expectations?
- Litigation Management – What did the organization learn about litigation estimating or budgeting that will help them on future litigation facing the organization? Did the business or functional units of the organization work effectively with in-house and outside counsel? Were the right people involved from the right units? Were roles and responsibilities clearly defined?
- Records Management – What was the impact of records management on the class action? Was it difficult or costly to obtain the information or documents necessary to litigate the case? Did the volume of data create undue expense? How could records retention policies be improved?
- Media/Public Relations – How did the class action affect the public image of the organization or get reported in the media? Did the organization have a media or public relations strategy for the class action and if so, what was the effectiveness of the strategy?
- Information Technology – What role did the IT group play in the litigation? Could the IT group implement new processes or practices around document collection for litigation? Should IT implement new practices or technologies to reduce costs and risks of litigation?
- Human Resources – What was the impact of the class action, if any, on employees? Did the class action create rumours or affect employee morale? How could internal messaging and other steps have mitigated this impact?
- Overall – What could have been done to increase success and decrease challenges?
Lessons for Outside Counsel
From outside counsel’s perspective, the “close out” also presents a great opportunity to learn from the class action. Counsel can reflect internally and consider what worked well and what can be done differently the next time it is defending a complex class action for a client. Consideration can be given to the role that others played in the litigation, such as experts, IT vendors and public relations consultants. Importantly, these lessons can be shared outside the litigation team to other members of the firm, so that all members of the firm can obtain the benefit of the knowledge gained through the litigation. Precedents can be developed for future cases. Sometimes there is a hesitancy to share negative experiences outside the litigation team, for fear that decisions will be second-guessed. A well-functioning and confident firm will push past that reluctance, so that best practices can evolve and mistakes avoided the next time around.
In addition, the “close out” can be an invaluable opportunity to strengthen the client relationship. Outside counsel can help educate the client on what it can do differently in the future and help develop risk management strategies or best practices that may be implemented by the organization to help avoid future litigation. It also presents a chance to have a candid discussion about the costs of the litigation and to highlight how counsel delivered value, and to understand whether the value provided reflected the client’s expectations. Feedback can be obtained about individual members of the litigation team, and a commitment can be made to make changes to the team if necessary for future matters. Perhaps most importantly, it gives outside counsel the chance to thank the client for entrusting the firm with the class action.
Why Project Management Matters in Class Actions
“Lawyers with strong project management skills and a deeper understanding of their clients’ businesses are able to drive greater client impact and improve matter profitability.” –Deloitte, Spotlight on General Counsel, 2015
Substantive legal knowledge, command of the facts and strong advocacy skills remain of crucial importance to the defence of a class action. However, managing the defence efficiently and in a cost-effective manner is increasingly important given the complexity of class action litigation. As we have tried to demonstrate through this multi-part blog series, by applying project management principles to the defence of a class action, such as blueprinting the defence, planning and budgeting the work involved, leveraging people and technology to reduce costs, ensuring effective teamwork, and capturing the lessons learned, class actions can indeed be managed to achieve success.