International Litigation

Q: 2. Please highlight a recent case study that best represents your litigation practice.

HSBC entities in litigation brought by The ECU Group plc • Cleary successfully represented HSBC on this matter since 2017. The liability trial in the English Commercial Court took place last year and was recognised as one of The Lawyer’s top 20 cases of 2021 . • The Court dismissed all claims brought against HSBC by ECU, which related to 52 FX orders (32 stop-loss orders and 20 market orders) executed by HSBC in 2004–2006. • We obtained an award of costs of the proceedings on an indemnity basis. • The matter demonstrates our strength as counsel in complex and highly contentious fraud litigation.

International Litigation - United Kingdom

posted 2 years ago

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1. Please outline the work your firm does and the ways in which you distinguish yourself in the provision of litigation advice.

Cleary Gottlieb’s litigation practice is known for:

• Representing many of the world’s most significant corporates, financial institutions and sovereigns on their high-value, reputationally sensitive and complex cross-border litigation matters. Some client feedback on what they see as distinctive about us is that “Cleary is brilliant – the partners are very bright and knowledgeable, with genuine control over both tactics and details, and the associates are also fully on top of matters and very engaged. Cleary are extremely efficient – you can absolutely rely on them to get the job done, and to get it done well.”

• Lean teams of excellent lawyers, respected by opponents, able to act quickly and effectively and handle complex matters across multiple jurisdictions. “This firm is a class act. They have really clever lawyers, they empower their associates at an early stage, they run lean teams, and they worry me when they turn up on the other side!”

• Depth of practice across Europe, the US, Latin America and Asia, which positions us uniquely compared to our competitors and is a feature highly valued by our clients. “The coordination between offices in different countries was entirely seamless.”

2. Please highlight a recent case study that best represents your litigation practice.

HSBC entities in litigation brought by The ECU Group plc

• Cleary successfully represented HSBC on this matter since 2017. The liability trial in the English Commercial Court took place last year and was recognised as one of The Lawyer’s top 20 cases of 2021.

• The Court dismissed all claims brought against HSBC by ECU, which related to 52 FX orders (32 stop-loss orders and 20 market orders) executed by HSBC in 2004–2006.

• We obtained an award of costs of the proceedings on an indemnity basis.

• The matter demonstrates our strength as counsel in complex and highly contentious fraud litigation.

3. What do you think are important factors for a client involved litigation?

• The reality is that clients almost never go willingly to litigation, whether pursuing claims or facing claims brought against them.

• One is also often constrained by historic and other factors over which the client has no control, such as the terms agreed to under a contract entered into a long while ago.

• While it is difficult to say what the important factors are in isolation of a particular situation, there are some factors that I believe contribute to clients being able to best deal with and manage litigation:

o A strong and focused internal legal team with a clear mandate from the business regarding the dispute at hand;

o Close working relationship and communication between internal and external lawyers;

o The ability to make real-time decisions on strategy, often in a relatively short time frame;

o Clients who are comfortable engaging with and assessing risk – there are no guarantees in litigation, and it helps if clients recognise the inherently unpredictable routes that litigation can take.

• English litigation at least is almost always public, and so clients who are prepared to manage attendant publicity, particularly from high-profile disputes, can also be important.

4. Many cases involve an international angle. What are some of the challenges in litigating on a cross-border level?

Almost all of the cases we seen have an international element, and so we deal with these issues all the time.

• Enforcement risk is always at the forefront of the client’s mind.

• Where there are simultaneous processes in multiple jurisdictions, this will create case management and strategy challenges in terms of coordinating and keeping abreast of developments and objectives (which may not always align) across jurisdictions.

• One of the reasons that clients come to us for complex cross-border matters is to ensure they have a cohesive and deliberate global litigation strategy.

• Challenges in cross-border litigation also often arise from differing expectations (be it of the client, opponents or lawyers) and the intersection of legal traditions around the world. A common example is different approaches to privilege, and the flip side of that being expectations around whether one may have to disclose documents to your opponent in litigation. Educating clients, and ourselves, about different legal systems and overarching litigation “themes” has been crucial in navigating these risks and knowing what questions to ask – even if working with an unfamiliar jurisdiction or system of law, as well as maintaining close working relationships with trusted co-counsel.

5. Have you seen an increase in ESG (environmental, social, and governance) litigation in recent years? If so, what challenges are associated with this?

Yes. The ESG environment is becoming increasingly litigious, and the number of cases, particularly in the field of climate change litigation, is rising rapidly. Companies are under increasing pressure from regulators, investors and the public at large to be more open about how their activities affect the environment.

While climate litigation to date has crystallised around claims against energy and natural resources companies, both in the EU and the US, we are seeing increasing diversity in the type of claims brought, with corporates in diverse industry sectors – such as aviation, steel and pharmaceuticals – facing claims.

We are also likely to see increasing geographical diversity in claims: climate change litigation has so far centred around the “global north”, but there is significant potential liability in the low- and middle-income countries of the “global south”, where the impact of climate change may be felt the most, which may not yet have been litigated.

A further avenue for disputes is likely to be at the board level, both as considerations of climate risk start to creep into the scope of directors’ duties, and as pressure from activist shareholders is likely to intensify.

Having a market-leading global disputes practice on your side is very important. We are involved in some of the most high-profile sustainability and “greenwashing” litigation and investigations matters, which positions us strongly to advise clients not only on substantive legal obligations and liabilities, but also on strategies for managing compliance programmes and handling civil and criminal environmental disputes.

6. Are there any new or pending developments that may impact your litigation work? These can include legislative/regulatory changes, technological developments, best practice, etc. How might these affect you?

Litigation Funding

The litigation financing market has developed significantly in recent years, and as litigation funding emerges as a distinct asset class, it is likely to become ever more prevalent. Funding options available to litigants are increasing; in particular, funders are willing to take portfolio risk rather than solely financing individual claims, and many funders are open to using innovative methods to fund the legal costs of defendants.

Growth of Collective Proceedings

The Supreme Court’s landmark 2020 decision in Merricks v Mastercard (which lowered the threshold that collective actions have to meet to obtain certification) has begun to unlock the potential for the collective regime in this jurisdiction, which was promised by the passing of the Consumer Rights Act in 2015. Since Merricks became the first collective action to be certified in August 2021, the Competition Appeal Tribunal has granted a further eight collective proceedings orders. We expect the trend to continue and to see continued growth in these types of claims, which are regularly among the highest value claims in the English courts.

Cryptoassets

The English courts have proved themselves flexible and pragmatic when dealing with novel claims involving cryptoassets. These cases commonly pose particular problems; they often involve a fraud that touches on a number of jurisdictions where it is difficult to identify the perpetrator or trace the relevant asset. The English courts have grappled with these difficulties and placed a number of tools at the disposal of the victims of such fraud. The rapidly evolving caselaw relating to crypto-assets includes rulings that have decided:

• cryptocurrencies constitute property under English law;

• disclosure orders (Bankers Trust and Norwich Pharmacal orders) seeking information regarding stolen cryptoassets may be served outside of the jurisdiction;

• a cryptoasset’s lex situs (the law of the jurisdiction in which property is located) is the place where the owner of the asset is domiciled;

• a third party debt order can be granted in relation to cryptocurrency;

• Bitcoin cannot serve as security for costs; and

• service of proceedings can be permitted via non-fungible tokens (“NFTs”) on the blockchain.

It is likely that England will continue to develop its status as a leading jurisdiction for the resolution of cryptoasset claims.

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