By Richard Healy, Managing Partner

The decision to bring a claim or fight a case may be one of the difficult problems faced by any business.

Before embarking upon litigation it is essential to balance the merits of the case against the potential costs, which are not limited to the financial costs.

Whether you win, lose, or draw the case it will be a major distraction. Staff (very often senior management) will have to dedicate resources to locating documents, discussing the intricacies of the case with lawyers providing input to witness statements etc. Obviously, whilst they are engaged in this process they cannot be performing their regular occupations. 

Further, litigation is by definition uncertain.  The most solid looking cases can fall apart when they reach court and any weaknesses will be quickly exploited at trial.  

The case of 2010 BSkyB v EDS case best illustrates how the outcomes of litigation can be a bolt from the blue. A £48million contract was entered into between BSkyB and EDS for the implementation of a customer relationship management project. Unfortunately, the business relationship proved unsuccessful and BSkyB subsequently brought legal proceedings against EDS, alleging that EDS made fraudulent misrepresentations that EDS was able to perform the contract within timescales.

Perhaps the most talked about aspect of the case was the performance of a key witness and former senior EDS employee, Joe Galloway who headed EDS’ Customer Relationship Management Division and was in effect the mastermind behind its bid.  Unfortunately for EDS Mr. Galloway almost single handedly demolished its defence and was found to have falsified evidence.

The most devastating blow to his credibility came from a dog name Lulu belonging to Mark Howard QC (who has recently been retained by OLN in connection with a piece of litigation).  Mr. Galloway was adamant in his evidence that he had attended and duly obtained an MBA from Concordia College in the US Virgin Islands, this went so far as to claim that he attended numerous classes a day for several months.  These claims, however, were demolished when Mr. Mark Howard QC produced the MBA Certificate which his dog Lulu had successfully obtained on the internet from Concordia College.  Lulu in fact achieved better grades than Mr. Galloway. 

The upshot of it was that Mr. Justice Ramsay found that Mr. Galloway did not just seek to boost his academic qualifications which might have had a limited effect on his credibility but that he gave completely falsified evidence.  In his judgment he stated “Joe Galloway’s credibility was completely destroyed by his perjured evidence over a prolonged period.  It is simply not possible to distinguish between evidence that he gave on this aspect and on other aspects of the case.  My general approach to his evidence has therefore to be that I cannot rely on the truth of his evidence unless it is supported by other evidence or there is some other reason to accept it.”  This left EDS with little alternative but to accept that Joe Galloway had lied to the court and perhaps hardly surprisingly he was dismissed from his employment with EDS. After a long battle, the parties announced a £318million settlement of the dispute – an amount way beyond the capped liability pursuant to the original contract!

While a majority of litigation cases settle, many settle after costly expenses have been incurred.  Assessing the risks of litigation can provide an evaluation of the merits and potential costs associated with a particular piece of litigation at an early stage.

BSkyB v EDS leaves us practical issues to consider. While the outcome of the case was indeed quite disastrous for EDS, litigants can take measures to reduce the various risks of litigation such measures can be summarized as PREPARATION, PREPARATION, PREPARATION.


•    Objectively assess your case before filing a lawsuit as litigation can be extremely resource-intensive – BSkyB v EDS lasted for 110 days, involving 500,000 documents and 70 witnesses!

•    Examine the facts, evidence, and claims that he or she wishes to present. Summarize the key facts in advance by reviewing documents or any available information, and interviewing witnesses.  Check that their statements are consistent with each other.

•    Create a succinct outline of the strengths and weaknesses of the position of your case. While supporting evidence and witnesses that prove your case can be the keys to your success, there is always a chance that a court might not accept all of your information as evidence. If your case depends highly upon oral evidence, this should be taken into account when determining the presentation and approach of your case.

•    Try not to rely upon the evidence of just one witness as the dishonesty of a witness can completely damage your case.

•    Consider who will need to give evidence – the more witnesses you put forward does not necessarily mean the better it will be for your case.  Confirm the witness background, experiences, and qualifications.

•    Prepare and evaluate the contents of the witness statements as these will be important pieces of evidence to be exchanged with the other side and to be presented in court.

•    What is your legal budget? The financial implications of bringing or defending a claim should be carefully considered. Legal fees in BSkyB v EDS were estimated to be over £70million! Although the general position is that the loser pays the legal fees and expenses of the winner, in reality, the winner often does not recover all costs incurred in its entirety.

•    Estimate hidden costs. There is always a price to pay for litigation, regardless of whether one wins or loses a case. Hidden costs, such as the effort, stress, and man-hours spent can be substantial.

•    Estimate potential reputational damage. Litigation can result in irreparable damage in reputation. Companies may strain relations with its customers or business partners and confidential business information may be revealed to the public.

•    Target an early settlement. With an early settlement, unforeseeable litigation risks and costs can be avoided.

Summary

Litigation can be uncertain.  Unusual circumstances can always occur.  However, these risks can be mitigated by good preparation. 

As Muhammad Ali said “the fight is won or lost far away from the crowd – behind the lines, in the gym and out there on the road long before I dance under those lights”.

Seeking legal advice before deciding on litigation can save you in the long run. OLN can guide you through all aspects of your case and advise on whether litigation is the best option. We pride ourselves in looking at the case from multiple angles, whether it be the opportunity cost of your employees, the financial reward or the damage to your brand.

OLN entered two teams into the Child Welfare Scheme (CWS) City Challenge.

The event, which was held on the 18th of February 2012, is an "Amazing Race" themed challenge were participants navigate Hong Kong island in a scavenger hunt. The race included tests on Nepalese general knowledge and fun challenges along the way.

One of the OLN teams, led by Adam Hugill won the corporate challenge.

The following article interviews another OLN team leader, Chris Hooley, head of the Corporate and Commercial Practice.

Click to enlarge

Article by Vera Sung, Partner


The Tenth Edition of the International Classification of Goods and Services, published by the World Intellectual Property Organization  in June 2011 will be used in the classification of goods and services for the purposes of registration of trade marks in Hong Kong starting from 1 January 2012.

What Changes?

The WIPO revises the International Classification of Goods and Services every 5 years to keep it up to date. Under the Tenth Edition, there are significant changes to the classification of goods and services to ensure that goods and services are properly classified in accordance with its function or purpose.

Some of the major changes to the classification of goods and services in the Tenth Edition include:

• Game and amusement apparatus:

1. “Games and amusement apparatus adapted for use with an external display screen or monitor” and “game and amusement apparatus other than those adapted for use with an external display screen or monitor”, which were formerly in Class 9, are now reclassified to Class 28.
2. In Class 28, “games other than those adapted for use with an external display screen or monitor” is now deleted and “apparatus for games other than those adapted for use with an external display screen or monitor” is now changed to “apparatus for games”.
3. “Video game machines”, “portable games with liquid crystal displays” and “arcade video game machines” are now added into Class 28.

• Dietary supplements, food additives and certain foodstuffs:

There are additions and changes to some of the indications in Classes 5, 29, 30 and 31. For example, “enzyme dietary supplements” is now added into Class 5 and “yeast of animals” in Class 31 is now changed to “yeast for animal consumption”.

• Additions and deletions of indications in various classes:

For example, “portable media players” is now added into Class 9 and “digital imaging services” is deleted from Class 41.

• Changes and transfers of goods/services from one class to another:

For example, “deodorants, other than personal use” in Class 5 is now changed to “deodorants, other than for human beings or for animals”. An example of transfer of goods is “drinking straws” in Class 20 which is now transferred to Class 21.

Apart from the above, there are also minor changes to other items across other classes such as the class headings, explanatory notes and general remarks etc.

Impact on trade mark applications and registrations

Trade mark applications and priority claims filed with the Trade Marks Registry on or after 1 January 2012 should classify their concerned goods/services in accordance with the Tenth Edition. To ensure registrability of the trade marks, cross-class clearance searches might be needed. On the other hand, owners of registered trade marks may be required by the Trade Mark Registry to reclassify their registrations so that they are consistent with the Tenth Edition.

How can OLN assist?

OLN can advise on the reclassification of trade marks and how the Tenth Edition may impact on your trade mark applications/registrations. 

This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.

OLN were proud sponsors of the annual Hong Kong Venture Capital Association Gala Dinner held at the Hong Kong Country Club in early January 2012. It was a great start to 2012 with the movers and shakers from the venture capital and private equity industry attending this gala event.

Gordon Oldham said, “We are proud to be associated with the HKVCA and their achievements. We are very much dedicated to Hong Kong and the venture capital and private equity world – the fact that we had a good turn out shows that Hong Kong is very much a big competitor in the corporate world and we anticipate that this will continue.”

The ladies of Oldham, Li and Nie have set up a new and exciting group, W@OLN!

W@OLN is a group of business and professional women who:

• Discuss and provide practical and legal solutions for women in the commercial world to help each other meet their aims and goals

• Maintain a supportive environment both professionally and personally for women in Hong Kong

• Support other women’s groups in the Hong Kong community and elsewhere

Why join?

There is no need for us to tell you that women in Hong Kong lead busy lives! To have a good support network of other women in Hong Kong and internationally is imperative to ensuring you have and get the best out of your hectic working schedule.

Having a group of other like-minded women in Hong Kong, both from OLN, as lawyers and other business groups will provide you with not only the support you need, but camaraderie, useful business contacts and the feeling of a business community within an already thriving Hong Kong.

There is no fee for joining and any one from the business world can join. We only ask that you support other business women within the Hong Kong community and provide your own time when available.

How does W@OLN work?

1. Contact either your usual lawyer at OLN or Michelle Liu at michelle.liu@oln-law.com to say “YES! I’d love to become a member.”
2. We will then sign you up to all the events and newsletters.
3. If you have any suggestions as to what you would like W@OLN to do and provide to you, please let us know – we are always open to suggestions!

Why wait?

We already have an excellent group of contacts in most areas of the Hong Kong market, so sign up now and learn more!