"Even without knowing the devil in the detail of corporate law, gatekeepers can provide vital assistance to those of us retained to advocate on their behalf."
The Complexity of Corporate Law
The corporate regulator continues to focus on responding to poor gatekeeper culture and conduct by taking enforcement or other regulatory action, where appropriate.
- commenced 101 investigations
- completed 93 investigations
- removed 24 people from providing financial services
- issued 75 infringement notices
- received payment of $1.2 million in infringements notices
- secured $13.4 million in compensation/remediation
- laid 96 criminal charges.
Not all litigious matters invoking the corporate law involve ASIC (although plainly the most serious often do). Disputes between companies, within companies, and when companies are insolvent or under administration, can all involve complex questions of corporate law.
There are over 1.9 million registered companies in Australia, and each must have at least one director. Gatekeepers - company directors and officers, auditors, insolvency practitioners and business advisers - do have difficulty keeping up-to-date with the many cases. In particular, the board’s focus has to be on the company’s strategy and performance.
Yet gatekeepers can provide vital assistance to those of us retained to advocate on their behalf, without knowing the devil in the detail of corporate law. First, some preliminary thoughts on advocacy, then 'managing' the dispute resolution process.
The ‘Art’ of Advocacy
“Whoever said ‘it’s not whether you win or lose that counts’ probably lost.”
Advocacy’s single objective is persuasion. Advocacy is not necessarily a matter of truth, but rather of persuading to a point of view, and doing so within the scope of the relevant rules, and without misrepresenting the truth, or misleading the decision-maker.
If an advocate can persuade the court or tribunal, the client will generally win the case.
A good advocate knows when a court or tribunal cannot be persuaded. That is when she needs to persuade someone else (ie. the other side) to settle on the best terms possible.
Often times, particularly in commercial matters, the mark of a good advocate can be the advocacy they demonstrate during the course of the proceedings, even before the final hearing, for example in settling strategic correspondence, crafting interlocutory pursuits, or taking an active role in settlement discussions.
How to help the advocate advocate well
Good advocates are good listeners, they exercise objectivity in judging what should and should not be argued, they are candid and frank with clients and instructors, and honest in their dealings with their opponents and the Court. They are industrious in their preparation and never “wing it”. They are courteous with all, and above all, courageous.
There may only be one advocate in a litigation team, but the best preparation, and advocacy, is the work of the team. As part of that team, company management and in-house counsel can help their advocate by asking: what can we do to help make our advocate good (or our good advocate even better)?
Good advocates will also exhibit coherent structure, selective content, good time management, question and answer skills, and above all, the ability to engage with the court or arbitral tribunal. Simplicity, flexibility and adaptability will be critical. To do this, they need clear (but nuanced) and timely instructions from the client.
Counsel aims for a strong opening and to develop a roadmap, which signposts the structure of the argument. They want to advance a plausible case theory – so your thoughts and input will be vital here. And they want to end well.
To understand and communicate the strengths of the argument, they also want to know the weaknesses and arguments their opponents may develop. You can help counsel stand in the shoes of the other side.
It is rare for counsel to receive positive feedback from a Court: “what a clever submission” is as unlikely to be uttered by a judge as it will by opponents, so your positive reviews, and refinements, are always welcome, too!
‘Managing’ corporate litigation
It is often remarked as refreshing when lawyers (barristers or solicitors) demonstrate an understanding of the challenges faced by in-house counsel in managing their internal stakeholders – whether that be a Board, CEO, line managers, subject matter experts – and the multiple issues that impact upon management of litigation.
Because as we should know, management of litigation involves consideration of much more than win or lose. There are questions of precedent setting (of contesting/settling); of reputation impact; of cost; and sometimes complex policy/ethical issues.
Experience suggests that clients value an advocate who can (1) synethesise legal concepts and strategic complexity into simple, clear and concise advice and (2) have insight into what in-house counsel has to deal with, in terms of communicating and ‘selling’ the advice internally.
A good advocate appreciates their role is not just to identify the legal and commercial issues that are involved in the dispute, and then artfully advocating that position in the court room. A good advocate appreciates that in house counsel need assistance in advocating that position internally, which involves not only scenario testing, but articulating the ‘business case’ for pursuing (or ending) the dispute. Let them help you.
Governance at the Core
ASIC recently warned (Rep 485 ) that it will focus on serious breaches of the corporate law where these indicate:
(a) poor corporate culture;
(b) misuse of cross-border services and transactions;
(c) failure by corporations to respond appropriately to the threat of malicious cyber activity;
(d) misalignment between company disclosures, product design and investor understanding and expectations; and
(e) serious ‘phoenix’ behaviour and improper transactions in the face of insolvency.
Since good corporate governance is clearly linked to corporate success - and the high esteem of the regulator - it is timely that this year's Governance Institute of Australia's National Conference has at its theme "Governance at the Core".
With so many new threats and challenges, embedding strong governance standards and structures throughout your organisation will lead to enhanced performance. Co-operative work by management, in-house and external counsel to best advocate complex legal matters is good practice, good governance, and good sense.
Dominique Hogan-Doran SC is a Senior Counsel of the independent Australian Bar with a national commercial/regulatory litigation & dispute resolution practice, operating from chambers in Sydney, Canberra and Adelaide.