Complex litigation playbook: four key considerations for 2023

A new year always prompts predicted legal trends. This year, increased litigation and investigations are amongst the commonly repeated projections - likely influenced by an apparent looming economic downturn, higher interest rates and a general sense of increased uncertainty - particularly in the tech sector. General uneasiness that the current administration will embolden business-related investigations and enforcement activity from regulators across industries is also of concern.

Assuming these predictions are right, it would be wise to revisit the complex litigation playbook and to reconsider preparedness and strategies. Several steps are critical for companies preparing for and addressing complex litigation challenges.

First, determine the composition and organization of the legal team. In complex cases, a variety of internal and external lawyers may have different roles and strategies. In other cases, it may make sense to have specialized counsel (e.g., regulatory to address specific regulatory issues in an investigation and/or litigation). Depending on the jurisdictions involved, companies may also need a variety of local counsel. At the outset it is also important to consider whether any current or former employees require separate counsel. Two approaches are critical in putting together the teams: (1) thoughtfully assembling an outside counsel team, taking into account the specific needs of the litigation and/or investigation; and (2) making sure that amongst internal and external counsel there is a clear leadership structure. This would preferably include one counsel responsible for coordination and making sure that all of the company's efforts are strategically smart, consistent and efficient.

Second, identify and (as appropriate) involve other constituencies. Major investigations and litigations may involve, or at least impact, multiple constituencies outside of the legal department. The Board should be the first consideration, including when and how to update the Board, which board committees might need to take a leadership role or warrant special briefings, and whether a special committee of the board should be constituted to conduct an independent investigation or address demands to the Board. Relatedly, counsel should coordinate with the finance team and Audit Committee on communication with outside auditors. In addition, in cases that are public or likely to become public, early involvement of the communications team and potentially external communications experts can help ensure that messaging and responses to press inquiries are handled thoughtfully and in close coordination with legal counsel. Finally, consider a communications plan for the broader employee base and other potential stakeholders. In many cases, broader communication about an investigation or litigation will not be appropriate at the outset but it is important to identify those who may be impacted and prepare messaging for the appropriate time.

Third, organize and consolidate litigation in the relevant jurisdictions. In most complex litigation cases, a number of related cases will be filed in multiple jurisdictions - often but not always in the state and federal courts where the company is headquartered and incorporated. The most important goal is to limit the number of active cases to the fewest possible jurisdictions and to organize litigation so that it can proceed in an orderly fashion. Sometimes this can be done, at least in part, through discussions with plaintiffs' counsel. Other times, this step will require filing motions to stay or transfer - with some courts being more willing to cede jurisdiction or an active role in the case compared to others. A company's preferred jurisdiction will depend on a number of factors that will need to be examined based on the circumstances of the case. In instances where cases are filed in multiple district courts across the country and/or in multiple state courts in California, counsel should consider a petition to the Joint Panel on Multidistrict Litigation for federal cases and/or the Judicial Council Coordination Proceedings in California.

Finally, involve insurers with potential coverage responsibilities as soon as possible. Although it may not be the first consideration, it is important to provide notice to all potentially impacted policies quickly and to keep carriers regularly updated.

While all potential litigation challenges cannot be predicted, following these high-level procedures before an investigation or litigation starts can help minimize disruption and set the matter on the right course for success.