Litigation & ADR annual report
M & A and capital markets disputes on the rise
A key challenge facing lawyers is being able to handle a new wave of mass consumer litigation , which involves using innovative technology to manage information
Litigation related to M & A and capital markets is on the increase , according to Pedro Rodero , managing partner of Ontier in Spain . “ We ’ re seeing more litigation with regards to M & A transactions , post-M & A , corporate conflicts disputes and also litigation related to the capital markets industry ,” he says .
Rodero adds that one of the key challenges facing Spanish lawyers is ensuring they are prepared to meet the demands associated with major litigation . He says a significant proportion of law firms ’ dispute resolution work will in future be “ built on massive litigation and consumer litigation ”. Indeed , some law firms – backed by financial investors – are preparing huge class action claims . “ These claims are not only in the financial sector but also in relation to insurance , airlines and energy companies , as well as with regard to professional liability issues ,” Rodero says .
Law firms need to be prepared to manage major litigation in which the management of documents and information needs very innovative technology , Rodero says . “ We have to be able to solve those complicated disputes and problems from a technological and logistic point of view ,” he adds .
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Surge in Portuguese litigation negatively impacting corporate valuations
While the increase in litigation in Portugal may be good for lawyers , it is having an adverse effect on corporate valuations , particularly in the banking sector , says João Caiado Guerreiro , partner at Caiado Guerreiro .
“ People litigate more and more ,” Caiado Guerreiro says . “ The recent increase in litigation relates directly to the crisis – we have plenty of work defending the banks .”
Banks remain one of the biggest targets for claimants , and this risk of litigation is a significant impediment to growth and investment . The delayed privatisation of Portugal ’ s second largest bank , Novo Banco , which emerged from the ruins of Banco Espirito Santo ( BES ), is a clear example of how the risk of litigation can deter investors – a legal action was brought by a group of investors related to losses on € 2bn-worth of Novo Banco bonds . This is one of the main reasons the Portuguese government is unlikely to recoup the € 4.9bn it spent rescuing the bank .
“ The problem is existing claims ,” says Caiado Guerreiro . “ When you look at the privatisation of Novo Banco , what you are seeing is that you can ’ t sell it without guarantees because of the litigation risk .”
Access to new and cheaper technology is also expected to give rise to class actions , albeit not on the same scale as in the US , Caiado Guerreiro says . “ Companies are a lot more protected here than in America , but entrepreneurial law firms are finding ways to work with significant numbers of clients ,” he adds . “ It is very much internet-based in terms of communication – costs are decisive , if you expect to be awarded a third of the settlement and the verdict is a big one , you can be happy fighting it in terms of the success fee .”
João Caiado Guerreiro
www . iberianlawyer . com January / February 2017 • IBERIAN LAWYER • 47