International Litigation, Discovery...or Not

ACC International Legal Affairs Committee

Legal Quick Hit: July 10, 2014

Presented by:

Cristian Gual

Uría Menéndez

International Litigation, Discovery...or

Not

Introduction

International Litigation: Discovery or not.

International Litigation and Discovery or not.

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International Litigation, Discovery...or

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Butler v. Rigsby, 1998 U.S. Dist. LEXIS 4618

“(...) Any and all documents, computer printouts, records, charts,

accounting records, tax records, canceled checks, written

contracts, letters of guarantee, correspondence and any and all

other tangible evidence which reflects:

A listing of the total number of patients treated at your facility which

are involved in litigation since January 1992”.

Ndlon v. Ice, 2011 U.S. Dist. SHIRA A. SCHEINDLIN, U.S.D.J.:

Cooperation and metadata

International Litigation, Discovery...or

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“Mutual knowledge of all the relevant facts

gathered by both parties is essential to proper

litigation”

Hickman v. Taylor (329 U.S. 495 (1947) at 507,

quoted by Geoffrey C. Hazard, Jr., From Whom No

Secrets Are Hid, 76 Texas Law Review, 1665, 1694

(1998)

V.

“Mutual knowledge of all the relevant facts alleged

by both parties is essential to proper litigation”

Aimed to...

International Litigation, Discovery...or

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International Litigation, Discovery...or

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Reaction Spanish lawyers tend to have when they hear

about the Discovery...

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International Litigation, Discovery...or

Not

Reaction American lawyers tend to have when they hear

we do not have discovery

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I. Starting points:

1. Why is a Spanish attorney conducting a session on Discovery?

2. Is Discovery worthwhile in international litigation?

International Litigation, Discovery...or

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1. Why is a Spanish attorney conducting a session on

Discovery?

We do not have Discovery...

Civil law jurisdiction...

International Litigation, Discovery...or

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International Litigation, Discovery...or

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Civil law jurisdictions Common law jurisdictions

The judge has the responsibility for

development the evidence

The advocates have the responsibility

for development of the evidence

A series of short hearing sessions

focused on evidenting issues

Pretrial (discovery) + trial

Judge* (who generally serves his entire

professional career as a judge)

Jury trial

Re-examination by the court of second

instance (extends to facts as well as

law)

Limited re-examination by the court of

second instance

From Whom No Secrets Are Hid, 76 Texas Law Review, 1665, 1694 (1998)

International Litigation, Discovery...or

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“Compared with America we are at a

great disadvantage,” (....) “There is no

class action, no discovery of

documents, and we—not the

company—have the burden of proof.”

Approach damages, class actions and discovery

International Litigation, Discovery...or

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Civil law jurisdiction without discovery...but

The number of international Discovery requests is increasing.

A wider exposure to its practice and problems, which clearly

extend beyond US borders, due to the growing

interdependence among legal systems.

Globalization of both business and litigation.

International Commercial Arbitration and IBA Rules on the

Taking of Evidence in International Commercial Arbitration.

International Litigation, Discovery...or

Not

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Civil law jurisdiction without discovery...but with similar

mechanisms (although with reduced scope and

requiring prior judicial intervention):

Preliminary proceedings

Advanced taking of evidence

Seizure of Evidence

International Litigation, Discovery...or

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...And common-law jurisdiction’ civil procedure rules

are exerting more influence over the way dispute

resolution is conducted in civil-law jurisdictions.

There are mechanisms that pursue the same aims

as Discovery, but remains a key difference:

Civil law: the parties explain the

facts

Common law: the parties share the

facts

International Litigation, Discovery...or

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Brief comparison between Federal US and Spanish civil procedure

US system – open ended

Initial Briefs Trial: Conclusions

Spanish procedural law – more restrictive

Initial Briefs Trial: Conclusions

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International Litigation, Discovery...or

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Spanish civil procedure – Initial briefs and preliminary hearing

Initial briefs: The parties submit their claims, defenses and other

allegations in writing, identifying their primary evidence

- It is important to properly define the initial claims

- Modifying the initial claims is not allowed

Preliminary hearing: Organization of the trial.

- agreement or settlement

- procedural issues

- disputed facts

- propose and admit evidence

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International Litigation, Discovery...or

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Spanish civil procedure – the trial

The trial’s purpose is to examine the evidence:

- parties’ testimony

- witnesses

- contradictory oral expert reports

- examination of evidence by the court

Once the evidence has been examined in court, the parties orally

state their conclusions on the facts of the case disputed

- the facts have been proven or remain disputed

- brief summary of the evidence produced on the facts

- legal arguments

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International Litigation, Discovery...or

Not

Civil law jurisdiction without discovery... but with an

arbitration system that may allow Discovery...

Spanish Arbitration Act (2003) based on UNCITRAL Model Law.

Unitary regulation for both domestic and international arbitrations.

Has become a real and effective venue for settling commercial

disputes in Spain.

Flexible procedure that may allow Discovery...(or at least a soft

version of it)

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2004 ALI & UNIDROIT Principles Of Transnational

Civil Procedure.

16. Access to Information and Evidence

16.1 Generally, the court and each party should have access to

relevant and nonprivileged evidence, including testimony of

parties and witnesses, expert testimony, documents, and evidence

derived from inspection of things, entry upon land, or, under

appropriate circumstances, from physical or mental examination of

a person. The parties should have the right to submit statements

that are accorded evidentiary effect.

International Litigation, Discovery...or

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2. Is Discovery worthwhile in International Litigation?

Asymmetric information vs. Information costs

"I know something you don't know"

Allows parties’ strategic behavior to

frustrate the transaction

International Litigation, Discovery...or

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Clear and well-known disadvantages...

Overly-intrusive

Time-consuming

Expensive

Susceptible to abuse by parties (fishing expeditions and document

dumps)

International Litigation, Discovery...or

Not

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Benefits...

Discourages gamesmanship

Prevents trial by ambush

Promotes justice by requiring disclosure of unfavorable documents

International Litigation, Discovery...or

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Understanding Discovery in International Commercial Arbitration through 'Behavioral

Law and Economics': A Journey Inside the Minds of Parties and Arbitrators, Harvard

Negotiation Law Review (2011)

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International Litigation, Discovery...or

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II. Thoughts:

1. International commercial arbitration

2. Abuse by the parties

3. Information costs

4. Burden of proof

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International commercial arbitration:

Flexibility and informality of arbitration procedures

Arbitrators as gatekeepers to Discovery ....

International Litigation, Discovery...or

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But...Discovery or not? It depends...

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Abuse of discovery (I):

Prisoner’s Dilemma

International Litigation, Discovery...or

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Discovery’s abuse (II):

Increase the adversary’s costs by engaging in additional discovery

unrelated to the merits

International Litigation, Discovery...or

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International Litigation, Discovery...or

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Information costs (I)

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International Litigation, Discovery...or

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Information costs (II)

Source: Timothy F. Prosser (2008)

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International Litigation, Discovery...or

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Burden of proof?

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Questions

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Cristian Gual Grau

URÍA MENÉNDEZ

(Lex Mundi member firm for

Spain)

Diagonal 514

08006 Barcelona (Spain)

Tel: +34 934 165 128

cristian.gual@uria.com

www.uria.com

Contact Information

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