One out of every 10 U.S. companies spends $10 million or more a year on litigation, not including settlements and judgments.1 How will this statistic be impacted by the ripple effect of the global financial crisis? During an economic slowdown, contracts are broken, employees are laid off, supply chains are disrupted, pension plans lose money, intellectual property rights are violated, professionals are sued for malpractice, shareholders demand accountability, and regulators become more aggressive. These are just some of the many types of issues that result in business disputes, many of which inevitably wind up in court.
In all litigation and regulatory matters, it is imperative to respond both strategically and in a timely manner. During the discovery process, identifying information needs, creating complete discovery requests and developing probing questions for depositions helps to ensure that counsel can represent their clients competently. Litigation is an ever-increasing business risk that public and private organizations must address. Understanding the strengths and weaknesses of a proffered position is essential. Furthermore, the ability to reach such determinations quickly can help limit financial exposure as well as the costs associated with handling the matter.
Challenges and Opportunities
Litigation usually is a long and protracted process, and often involves multiple parties and highly complex issues. To help manage these matters in an efficient and cost-effective manner, organizations should assemble a multidisciplinary team that can assist through most stages of the litigation lifecycle.
- Data forensics and e-discovery – Litigation frequently involves large amounts of data that must be captured, preserved and analyzed. Since information frequently is stored in a company’s computer system, the ability to acquire, preserve and review this information is critical. If information is not obtained properly, the company may be exposed to fines, penalties or criminal charges.
- Litigation support – Once information is obtained, it is critical to have the right team in place to help organize, manage and make sense of it in order to navigate effectively through the discovery process.
- Expert testimony – Once information has been collected and analyzed, organizations usually require a qualified expert who can deliver findings in a clear, concise and compelling manner. These individuals not only must be able to render an expert opinion, but also must have the experience to be considered credible.
Our Point of View
Deploying seasoned and independent experts at each stage of the litigation lifecycle can have a significant impact on the ultimate cost and outcome of litigation. To preserve the organization’s reputation and shareholder value, it is crucial to retain experienced professionals who have extensive expertise in damage and lost profit analysis, business and other valuations, complex database and document management, forensic accounting, fact gathering, and an established record serving as fact or expert witnesses. The goal is to recover costs (detective) and reduce future cost overruns (preventive).
How We Help Companies Succeed
Protiviti helps minimize the risks associated with litigation by providing unbiased and objective assessments of complex issues, resulting in efficient and effective trial and settlement strategies.
Through our global network of resources, we can ensure you obtain an immediate response to your needs. Our experience includes legal and regulatory actions related to commercial disputes, intellectual property claims, securities litigation, professional malpractice and fraud, as well as other claims.
Our expertise includes providing services in the following types of matters:
- International arbitration
- Accounting malpractice
- Domestic alternative dispute resolution
- Accounting issues
- Broker/dealer claims
- Breach of contract
- Breach of fiduciary duty
- Directors and officers liability
- Lost profits
- Securities litigation and fraud
- Preference and fraudulent conveyance actions
- Insurance claims/recovery
- Purchase price/post-acquisition disputes
- E-discovery production
- E-discovery review
- Data and e-mail mining
- Document management
- Assistance with discovery
- One of the largest international insurance companies retained Protiviti to work with counsel to review insurance policies in order to understand the policy provisions and requirements for claims to be filed. Protiviti also assisted this client with data preservation, collection, processing and production. This information was used to understand potential exposure, which became the basis for negotiation in connection with numerous arbitrations. Leveraging our extensive capabilities and expertise, we were successful in helping our client:
- Create a claims management solution that established an electronic document warehouse and retrieval system for over eight million documents.
- Provide a proprietary modeling tool to analyze the exposure of a program and determine if a buyout or workout needed to occur before claims were filed.
- Develop an iterative model to provide several “what if” scenarios on the individual claims and to identify acceptable settlement ranges.
- Protiviti served as the only expert witness for plaintiff’s counsel in a large civil and fraud claim filed against the servicer of a securitized portfolio of receivables. A $40 million countersuit for alleged wrongful termination was consolidated with this action.
From tens of thousands of documents in hard-copy form, Protiviti reconstructed several hundred financial transactions and unraveled a complex financial reporting scheme that disguised the misdirection of tens of millions of dollars. The court subsequently awarded all of the plaintiff’s civil and fraud claims plus professional fees and pierced the corporate veil for scores of related entities.
The judgment reported that significant weight was placed on the testimony of Protiviti’s expert.
1Fulbright & Jaworski LLP’s “Fifth Annual Litigation Survey Findings,” October 2011.