By Jonathan Hilliard
All together now
7 March 2011
Commercial disputes require a blend of expertise, meaning practitioners cannot work in isolation.
The most interesting and important legal disputes frequently arise at the boundaries of areas of law. Fiduciary and commercial disputes often involve other areas, from at one end of the spectrum insolvency, financial services and other types of regulatory work - reflecting the use of trusts and other vehicles in commercial settings - to family and criminal law at the other end, reflecting the use of trusts to store private wealth.
The financial crisis has given rise to a lot of technical work, often involving complex regulatory, insolvency and foreign law questions, but requiring a commercial-chancery grounding to deal with fiduciary and commercial issues.
Similarly, the increasing focus on trusts in divorce and family law has led to disputes that cross traditional boundaries. Such work is fascinating and important, often breaking new ground where areas of law intersect or clash, but it gives rise to corresponding challenges for practitioners in ensuring they are able to deal with all aspects of these disputes in a coordinated manner.
Access all areas
A good place to start is the Lehman Brothers insolvency. The past few years have seen disputes over the treatment of regulatory pensions regimes in the Lehman and Nortel insolvencies in the UK, the US and Canada. This involves pensions, insolvency, private international law and foreign law.
It takes into account the extent to which client monies are held in statutory trusts under the financial services regime, bringing financial services, trusts and insolvency
law into the picture, and touches on the interpretation of standard form swap agreements and their operation in insolvencies, thus involving the banking, commercial and insolvency areas, to name but a few.
In each of these types of dispute there is the potential for lawyers from different areas of practice to offer detailed and technical insights that others may not be able to.
For example, a pensions team is necessary to understand the workings of the regulatory pensions regime and how it is intended to function, but an insolvency team is needed to deal with how the regulatory regime will best fit with the Insolvency Act regime in an administration or liquidation.
You can see the same thing when the focus shifts to trust litigation. High-net-worth family disputes now often have important private trust elements, both offshore and onshore. This makes close coordination between UK family, trust and tax law practitioners and lawyers in offshore jurisdictions a must if family members are to be able to deal with the relevance of family trusts to proceedings, their operation, the disclosure of information in relation to them, family courts’ powers in respect of trusts and the ability to implement orders in relevant jurisdictions.
Similarly, the Proceeds of Crime Act (Poca) and foreign regimes often play their part in fraud and other asset recovery claims. This makes a working knowledge of restraint orders and the Poca confiscation powers an important part of the toolkit for such claims if, for example, a claimant is to be able to assess the likely role that asset recovery agencies will play in a claim, what assistance they might offer and to whom any recovered assets are likely to go.
These cross-over disputes raise a number of challenges for lawyers. The challenges include accessing technical expertise in a number of areas; the need for the lawyers first dealing with the dispute to know enough about other areas of law to identify when a technical issue arises from another area; the need for legal teams covering various areas of law to tackle every aspect of the dispute; and the need for specialisms to work closely together to address issues arising at the boundaries.
In the first instance, the problem for the solicitors and barristers involved is identifying issues that might arise across different areas of law, particularly those outside their usual fields. In some cases issues from other areas will be obvious; but in many others, spotting them will require technical knowledge of another area.
Having done this, a team must be assembled that can handle all aspects of the dispute. This might mean not only various departments of a firm acting together, but also a coordinated team of counsel from a variety of specialisms.
Specialisms can learn a lot from each other, and cross-over disputes are a good opportunity to do this.
Jonathan Hilliard is a barrister at Wilberforce Chambers