Progressing the case

Typical procedural steps

What is the typical sequence of procedural steps in commercial litigation in this country?

A typical commercial case that proceeds through trial follows this sequence:

  • a complaint is filed;
  • an answer or motion to dismiss is filed;
  • if any claims remain after a motion to dismiss is resolved, the parties proceed through fact and expert discovery;
  • after sufficient facts are adduced through discovery, many litigants move for summary judgment if no genuine issue of material fact exists to warrant a trial; and
  • if summary judgment is denied, a bench or jury trial is conducted.
Bringing in additional parties

Can additional parties be brought into a case after commencement?

State and federal courts have rules that allow new parties to be drawn into litigation under certain circumstances. In the federal system, for example, a defendant can serve a complaint on a third party ‘who is or may be liable to it for all or part of the claim against it’ [Fed R Civ P 14(a)(1)]. If a defendant files a counterclaim against the plaintiff, that plaintiff may also bring in a third party on the same basis. Federal Rules 19 and 20 set forth provisions for when a third party must, or may, be joined. On their own initiative, federal courts can also add or drop parties as appropriate.

Consolidating proceedings

Can proceedings be consolidated or split?

State and federal courts can consolidate related actions for one or more purposes, ranging from joint discovery to a consolidated trial on all claims and issues. To avoid prejudice or to promote judicial economy, courts can also order separate trials on separate issues and claims, or sever claims out of a case.

Court decision making

How does a court decide if the claims or allegations are proven? What are the elements required to find in favour, and what is the burden of proof?

The fact-finder - either a judge or a jury - must consider the evidence presented to determine if a plaintiff has satisfied its burden of proving the elements of its claims. Every cause of action has its own distinct elements. Most civil proceedings have a preponderance of the evidence burden of proof, which requires only that a plaintiff prove its position is more likely true than not - also referred to as the greater weight of the evidence. Some claims require a higher clear and convincing evidence burden of proof.

How does a court decide what judgments, remedies and orders it will issue?

Generally, a court enters a judgment or awards remedies based on the specific requests made by a plaintiff in the pleadings or at trial, assuming the evidence presented supports those requests. While orders can be issued by a court sua sponte, they are most often entered in response to a party’s motion.

Evidence

How is witness, documentary and expert evidence dealt with?

Typically, for a party to be able to rely on a witness or a particular document affirmatively, the witness must be disclosed and the document must be produced to the opposing party during discovery. Many witnesses provide sworn deposition testimony before trial. Experts must generally prepare written reports summarising their opinions and the underlying data considered, and they must submit to depositions as well.

Live witness testimony is generally more impactful and, thus, preferable. However, some witnesses are unavailable for trial, in which case deposition testimony must be presented via video or by reading the transcript aloud. In complex commercial matters that tend to be document-intensive, one common tactic is to create compilations or demonstrative exhibits that summarise a large volume of documents.

How does the court deal with large volumes of commercial or technical evidence?

Some courts will appoint ‘special masters’ - often former judges or reputable practitioners - to analyse and summarise voluminous sets of technical evidence to aid the presiding judge. Judges also rely on the parties’ counsel to determine how best to streamline the presentation of voluminous evidence.

Can a witness in your jurisdiction be compelled to give evidence in or to a foreign court? And can a court in your jurisdiction compel a foreign witness to give evidence?

Tools exist for obtaining testimonial and documentary evidence abroad for use in US proceedings, and vice versa, including use of the Hague Convention, letters of request and letters rogatory. Obtaining international discovery can take considerably longer than domestic discovery, and the responding party will likely have more grounds to object or limit the scope of his or her response, including, for example, EU privacy laws.

How is witness and documentary evidence tested up to and during trial? Is cross-examination permitted?

Most trial witnesses are deposed prior to trial, which gives the opposing party a preview of their likely testimony. Any witness who testifies at trial is subject to cross-examination. For documents to be available as evidence at trial, they must generally be produced during discovery, although documents not produced in discovery can still be used for certain limited purposes, including impeachment.

Time frame

How long do the proceedings typically last, and in what circumstances can they be expedited?

This depends entirely on the court in which a case is pending, as well as the number and complexity of the claims. Broadly speaking, most commercial litigations filed in state and federal courts are resolved within one to two years of filing. Some jurisdictions, such as the US District Court for the Eastern District of Virginia (known as the ‘Rocket Docket’), routinely resolve matters in less than a year. Other jurisdictions - particularly those with limited judicial resources - may have complex cases pending for four to five years, or longer. Proceedings can be expedited when all parties consent to an early trial date, or when, for example, injunctive relief is sought, such that the exigencies of a case genuinely require swift resolution.

Gaining an advantage

What other steps can a party take during proceedings to achieve tactical advantage in a case?

Whenever appropriate, many litigants will file a motion to dismiss at the outset of a case in lieu of answering a complaint. Perhaps the most common type is a motion for failure to state a claim upon which relief can be granted, which accepts as true all well-pleaded allegations of fact and argues that, even on those facts, the claims are not legally actionable. Other common initial bases to dismiss are for lack of personal or subject matter jurisdiction. A motion to transfer venue to a more favourable forum is another tool some litigants use early in a case to gain a tactical advantage.

A motion for summary judgment is often filed in the more advanced stages of proceedings to win judgment without the need for trial. Typically, summary judgment motions are not filed until at least some discovery is taken, because the moving party must demonstrate that no genuine issue of material fact exists, which can be difficult to do without discovery.

Impact of third-party funding

If third parties are able to fund the costs of the litigation and pay adverse costs, what impact can this have on the case?

As some states have begun softening common law restrictions on maintenance and champerty, third-party litigation funding has begun to emerge as an industry in the US. Third-party funding can result in claims being pursued that might not otherwise be filed due to lack of resources. And given that the appetite for litigation often decreases as legal fees mount, external funding can increase a plaintiff’s staying power and, consequently, lengthen the duration of a case. Proponents characterise third-party funding as a justice-promoting tool that ensures corporate defendants cannot effectively immunise themselves from liability based on the depth of their pockets.

Because litigation financing is almost always an aid to plaintiffs, whose prospects for monetary recovery incentivise third-party investment, many critics worry about the negative impact on defendants - particularly those more susceptible to high-dollar claims (eg, patent or copyright infringement, antitrust) due to the nature of their business. In addition, while ethics rules can limit a funder’s ability to control litigation strategy or settlement determinations, the mere existence of a third-party funding arrangement - and the financial agreement between the funder and the plaintiff - can have a significant impact on settlement decisions, pushing plaintiffs to seek larger payouts, which can delay settlement or preclude it altogether.

Impact of technology

What impact is technology having on complex commercial litigation in your jurisdiction?

Technology has significantly impacted complex commercial litigation in the US in recent years. All federal courts, and many state courts, allow documents to be filed and accessed electronically. Some courtrooms can accommodate paperless trials, though available technology varies widely by jurisdiction. The discovery process has also been transformed by technology. Technology-assisted review (TAR) of electronic documents is increasingly common, particularly in complex litigations. TAR is an attractive option for litigants who face onerous and expensive document reviews. TAR is not without risks, however. A poorly designed or negotiated TAR process may result in errant production of sensitive documents, inadvertent exclusion of relevant documents, costly discovery disputes or even court sanctions. A litigant considering a TAR should therefore engage competent and experienced counsel to manage the discovery process.

Parallel proceedings

How are parallel proceedings dealt with? What steps can a party take to gain a tactical advantage in these circumstances, and may a party bring private prosecutions?

Parallel proceedings are increasingly common, particularly in highly regulated sectors including financial services, pharmaceuticals and energy. Individuals and corporations facing parallel civil litigation and criminal or regulatory investigations must be carefully attuned to the effect that a decision or outcome in one action may have on other proceedings. For example, an individual may choose to assert his or her rights under the Fifth Amendment, which protects against self-incrimination, if asked to testify in a civil or regulatory proceeding related to pending or anticipated criminal charges. Relatedly, under certain circumstances, producing documents or providing testimony in one proceeding may risk waiving privilege or confidentiality of that information, rendering it available to adversaries in other forums.

Although private parties generally cannot prosecute criminal or regulatory violations, they can report suspected or known criminal or regulatory violations to the appropriate authority or authorities. A number of state and federal laws exist to protect whistleblowers. The False Claims Act also allows private individuals (called ‘relators’) to file actions on behalf of the federal government against entities that have allegedly defrauded it.